S&P 500: Bearish Vibes

Looming Bearish Crossover

Week 2: Market Health Check

Bearish Vibes

The S&P 500 closed the first full trading week of 2025 down 1.94%, with the Nasdaq faring slightly worse at a 2.24% decline. Small-cap categories didn’t escape the downturn either, as the Russell 2000 dropped 3.49%, and Cathie Wood’s ARKK—a modern-day barometer for small caps—took the hardest hit, falling nearly 4%.

Since the December 18 “Alarm”—an event triggered when all three risk-off criteria are active—the S&P 500 has struggled to regain its uptrend, keeping caution at the forefront. The bearish undertone persists— bearish vibes if you will. For those who missed it, the out-of-cycle note issued on December 18 has been made available for all subscribers to review. (December 18 - Alarm)

Risk Off Criteria - 3/3

In my analysis, three key components determine whether the market environment is risk-on (bullish) or risk-off (capital preservation mode/bearish). As of the close on January 10, all three risk criteria remain active.