VoSI Focus List Review for the Week Ended March 28, 2025

Published:

30 Mar 2025 00:58 ET

Major market indexes cascaded to the downside after the S&P 500 failed at 200-dma support and the NASDAQ Composite failed at 20-dema support on Wednesday. Both indexes then pushed lower all week, gathering momentum on Friday after the Personal Consumption Expenditures (PCE) inflation data showed Core PCE at 0.4% vs. expectations of 0.3%. The annual rate also rose to 2.8% vs. expectations of 2.7%. The data show that price levels continue to rise. Both indexes ended the week with bear flag/pennant trendline breaks to the downside as they now look set to test the prior March lows.

Virtually nothing has been spared on the downside, as the group chart of sector ETFs below shows. Over owned, overplayed, and over-valued tech has taken the brunt of the selling, but as the indexes come down this has spread aggressively into other areas of the market. Note the short-sale entry trigger in financials on Friday as the SPDR Sector Select Financials (XLF) ETF busted 50-dma support and streaked lower.

Only the precious metals space has been able to buck the trend as gold posted a new all-time high on Friday when COMEX Futures hit $3,124.40 an ounce, sending the SPDR Gold Trust (GLD) to matching all-time highs.

Meanwhile Bitcoin ($BTCUSD) has triggered a short-sale entry after breaking below 200-dma support on Friday.

The market is clearly in a correction, the only question now is whether it will find a bottom any time soon or whether we will look back on this initial break off the late February highs in the S&P at the start of a new bear market. A major catalyst will arrive on Wednesday when an array of tariffs go into effect on April 2nd, which President Trump has dubbed Liberation Day. So far, all it has done has been to liberate investors from their wealth as the major market indexes look set to begin a second leg down in a continuing market sell-off. Cash is king.
The Market Direction Model (MDM) switched to a BUY on Monday, March 24, 2025 and then switched to CASH/NEUTRAL on Friday, March 28, 2025 where it currently remains.

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