“In December, the S&P 500 Index (SPX) came close to reaching a projected level of 6118, which was set following a breakout earlier in the year. This projection is based on the upward trend from 2020-2021 starting from the low point in 2022. This suggests that there may be a period of consolidation expected in the first half of 2025. The monthly MACD histogram indicates that the momentum driving the upward trend has begun to decrease in Q4, supporting the possibility of corrective price movements at the beginning of 2025,” shared Will Tamplin, a senior analyst at Fairlead Strategies, with Business Insider.
“Bull markets are akin to cruise ships: once they gather momentum, they can be challenging to halt. Looking back over the past 50 years, when a bull market reaches its third year, historical data suggests there could still be significant gains ahead. Recent bull markets that reached this point lasted at least until their fifth year, with an average gain of eight years. Therefore, it may be premature to dismiss the bull market in 2025,” according to Ryan Detrick, the chief market strategist at Carson Group, speaking to Business Insider.
“The 10-year UST yield has broken a long-standing downtrend since the 1981 highs. The recent higher high above 3.25 (’18 highs) confirms this significant reversal. Typically, after a trend reversal, there is a retest of previous levels,” remarked Craig Johnson, the chief market technician at Piper Sandler, in conversation with Business Insider. Johnson further noted, “We anticipate a retracement or pullback to find support around the 3.00% – 3.50% range in the second half of 2025. A decisive break below that level could indicate serious economic challenges. Historically, gradual Fed rate cuts have been positive for equities, particularly for Small and Mid-Cap stocks.”
“The key chart to monitor as we approach 2025 is the performance of high-momentum stocks versus low-momentum stocks, based on the top winners versus losers over the previous 12 months. The momentum factor has historically outperformed during the period between the broadest market participation and the market’s peak. Looking forward, two scenarios may unfold: 1) a broadening of the bull cycle driven by ‘catch-up’ in low-momentum stocks, a positive outlook for all stocks; or 2) a narrowing of the bull cycle influenced by low-momentum stocks, with continued outperformance by the momentum factor,” explained Ari Wald, managing director at Oppenheimer, to Business Insider.
“In 2025, the technology sector will be under scrutiny for delivering results, with software stocks expected to lead the way. Technically, we observed a rounded bottom base over two years from 2022 to 2023. The breakout occurred in 2024, followed by a consolidation phase before a significant upward move toward the end of
“I will closely monitor various indicators of market breadth, such as the advance-decline line, the percentage of stocks trading above their 50-day moving average, and the number of new 52-week highs and lows. Throughout the post-election rally in the fourth quarter, we have witnessed a trend of limited leadership, predominantly driven by mega-cap growth stocks that have fueled most of the market gains while other stocks have faced challenges. According to David Keller, the chief market strategist at Sierra Alpha Research, a sustained decline in market breadth indicators as we move into early 2025 could signal a potentially weaker start to the year and an increased possibility of a corrective downward trend in the first quarter,” as reported by Business Insider.
