The Big Picture Is Bullish
Help The Eyes
This is when the real work begins.
The market is closed. The news cycle slows.
Saturday mornings are for stepping back and seeing the forest, not just the trees.
I spend this time ripping through 3 – 10 year weekly charts.
Why?
Because these charts filter out the noise of the daily news cycle.
We used this longer timeframe to step in during the April lows.
Did we know it was the bottom?
Absolutely not.
But price was telling us to there was opportunity in the chaos.
That’s the power of structure, momentum, and breadth on the bigger picture.
We already know the market is going up.
Now it’s time to ask the harder question:
Where are we in the cycle?
To me, it looks like we’re just getting started.
The Chart – 6 Years | 3 Drawdowns | 1 Playbook
Look at this 6-year weekly chart of the S&P 500.
It provides context for the bigger picture and clues to where we may be headed.
We’ve had three major drawdowns during this period.
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The 2020 COVID Crash
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The 2022 Bear Market
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The 2025 Tariff Tantrum
In this ONE chart we can see the message of the market over the past 6 years.
Drawdowns and recoveries share momentum and breadth characteristics.
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RSI (Momentum) is back in a bullish regime. Sitting in the 60s.
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In healthy trends, RSI lives above 50 and often presses above 70.
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We are in that zone and strengthening. Checking the momentum box.
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Breadth is improving. About 60% of S&P 500 stocks are above their 200-day.
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In prior sustained advances, that number sits closer to 70% and holds.
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We have not eclipsed 70% yet but don’t confuse that with weak breadth. We are improving and have plenty of room to the upside.
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This is where education and experience make the difference.
The characteristics of price action provide the clues.
Momentum, breadth, and structure help solve the puzzle of where we are in the cycle.
There’s nothing about current action that looks extended on a weekly basis.
If anything, this looks like the beginning of a new trend, not the end of one.
Just Getting Started….
Yes, the short-term tape might be stretched.
But zoom out, and this looks like a market just getting started.
We’ve reclaimed highs. Breadth is building. Momentum is supportive.
And we now have a clear risk-reward zone around 6000 on the S&P to manage against.
This is not the time to anchor to the pain from earlier this year or the speed of the rebound.
A recovery already happened. Now the groundwork is set for a sustained uptrend.
As the old saying goes:
When in doubt, zoom out.
And this chart does everything except make me doubt.
My Weekly Show – Thompsons Two Cents
🎥 Check out the latest episode of Thompson Two Cents Live!
I go live every Friday at 5 PM EST.
Breaking down some key market themes heading into the weekend.
This week, I break down:
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The battle between beta vs. momentum.
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The evolving risk-on rotation happening beneath the surface.
🚀 Throw it on 1.5x speed and let it rip.
👍 Give it a like. It’s the easiest way to show me some support.
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💬 Drop a comment or question – I always make time to respond.
Cheers,
Larry Thompson, CMT CPA
