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The general market, as represented by the SPX index, has been healthy and steady, as demonstrated by the following chart. Prices are holding above both horizontal and trendline support, while the number of new NYSE 52-week lows has remained at harmless levels. I will remain optimistic about stock prices, and I will remain invested in stocks, as long as the SPX price continues to remain above these support levels.
 

Next, here is a look at the chart of the SPX equal-weight, which does a better job than the SPX capital-weight at showing how the general market is behaving. As you can see, starting in mid-November, this broader market ETF started performing extremely well.

This indicates that more stocks have started participating in the market's rally, and it is generally thought of as a sign of a healthy market, although there are still some concerns, which I will address in a bit.
 

The chart below is a look at what I use to help me understand the short-term trend of the market. At the moment, I believe the market is starting a short-term downtrend, although not all the indicators are in agreement with this assessment.
 

Here is an example of one chart that clearly does not indicate the start of a new short-term downtrend. These three summations are all pointing upwards, although they do look a bit extended.
 

I like to check in with the chart of the junk bond ETF once a week to make sure that its price is moving in the same upward direction as the SPX, and, at the moment, it is certainly pushing higher and providing me with added confidence to continue holding stocks.
 

The number of NYSE new 52-week highs and new 52-week lows continues to align with a healthy market. In general, when the PMO index moves lower from the high of its range, and the number of new 52-week lows remains at harmless levels, I view this as a normal pause in the market's price uptrend. In addition, it will usually result in a pull-back in prices that can serve as a buying opportunity.
 

The bottom line: The market looks healthy at the moment, and I am thinking that stock prices may be ready to pause or pull back in price. I will probably trim some of my holdings in order to capture recent profits and to have available cash to deploy when the time is right.

Meanwhile, this next chart often helps me to understand the longer-term trend of the market. At the moment, the indicator is pointing decisively higher, so I am expecting to see higher stock prices as well.
 

Here is a monthly chart of the gold miners ETF, and it seems quite obvious that this group has taken off in a big way. The rally started in 2024. No one would be surprised to see this ETF pull back in price after such a huge move. So I am watching the daily chart carefully and holding gold-miner stocks very cautiously.
 

This next chart jumps over to the daily timeframe. I think I'll probably be a strong seller if prices dip below this 21-day EMA, but I'm inclined to hold or even add to positions (gulp) while this momentum indicator points higher.
 

Here is a look at the commodity ETF in which the prices of gold and silver are included. This breakout of a multi-year base is very important to the general market for stocks.

First, there is no way that you can significantly lower interest rates with commodity prices breaking higher. Second, when commodities start to rally like this, it is usually an important sign that the economy is entering its late stage in the cycle. In other words, the economic cycle starts to get to a certain point where it is showing signs of fatigue, and it is at this point that commodity-related stocks lead the market toward the gold miners.

This is really important for investors. Technology stocks often underperform during the late stages of the economic cycle.
 

Here is a chart from Seeking Alpha that shows which groups perform the best during the late stage of the economic cycle. Where are we now in the cycle?  We are transitioning from bull market to market top.

As evidence, technology is starting to lag the market, and in its place as leaders are Industrials and Basic Materials, with Energy and Staples showing early signs of strength. That is classic late stage rotation. In other words, it seems we are getting nearer to a market top.
 

I have no way of knowing how long the late stage of the cycle will last, but when commodities and commodity-related stocks top out, Healthcare, Utilities, and Financials will likely start to lead. This is the critical signal that the bull market is topping and is getting very close to transitioning into a bear market.

What to do? Well, I am trimming my Technology and Industrial holdings for sure, and I am not buying any new stocks with the intention of holding them long-term.

Outlook Summary

• The short-term trend is down for stock prices as of Jan. 15.
• The medium-term trend is neutral for Treasury bond prices. 

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