October 31, 2025 – Art Hill, Chief Technical Strategist at TrendInvestorPro.com, joins Jim Puplava to break down the latest record highs in the US stock market and share his technical outlook for the months ahead. Art analyzes the trends driving the S&P 500, the Mag 7 tech stocks, and key asset classes including gold, silver, oil, and bonds. He discusses the risks of market froth, the potential for corrections, and how investors can navigate current conditions. Art also touches on breadth indicators, seasonality, and defensive strategies. Don’t miss this in-depth discussion with actionable insights for every investor.
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Key topics discussed:
- All three major US stock indexes are in record territory, with discussion on whether the rally will continue through year-end.
- Art Hill, a market technician, explains the significance of the S&P 500 and Nasdaq being well above their 200-day moving averages.
- The Mag 7 stocks (large-cap tech leaders) are analyzed as primary market drivers, with warnings about frothy, overextended conditions.
- Art gives his technical outlook on gold and silver, describing recent parabolic moves and the potential for further corrections or consolidation.
- Discussion on why oil remains choppy and in a downtrend, with no clear signs of a sustained rally.
- Analysis of interest rates and bond markets, including the implications of recent Fed rate cuts and trends in Treasury yields.
- Commentary on the US dollar’s recent bounce and its relationship to gold prices.
- Evaluation of market breadth and small caps, highlighting concerns about the lack of broad participation and increasing new lows.
- Guidance for investors on staying with leading sectors, using hedges or protective stops, and monitoring key technical signals.
- Insights on seasonality and why November and December typically offer a tailwind for stocks, but caution is still warranted.
Transcript
Jim Puplava:
Well, it’s been another good week for investors as all three major indexes are in record territory. Will this rally continue to year-end with the Santa Claus rally? Let’s find out. Joining us on the program is Art Hill from Trend Investor Pro. And Art, you have sent us a series of charts we’re going to be talking about. And just to let our listeners know, if you go to the website and want to follow along while listening to the podcast, we’ll feature these charts. But let’s begin right at the top with the S&P 500. You’ve got one that says it’s 10% above its 200-day moving average since September. What does that mean technically? What is that telling you?
Art Hill:
Well, it means you’re in a strong trend and you’re possibly getting overbought. But as we’ve seen time and time again in strong uptrends, you become overbought and you remain overbought as buying pressure stays. I just went back over the last three or so years, and you could see periods when it became overbought. It got 10% above its 200-day EMA. And, you know, sometimes it picks a top, like July 2023. But in late January 2024, the market continued higher for a few more months, as it did in May of 2024. So it doesn’t mean you have a top imminently, but it does mean you’re getting a bit frothy and you need to be a little bit conscientious and careful.
Jim Puplava:
And that’s your second chart, which is the Triple Qs, which is really the best of the high-tech stocks. That is two standard deviations above its 200-day.
Art Hill:
Yeah, this is using classic Bollinger Bands. And in Bollinger Bands your middle line is the 200-day simple moving average, and then you put the bands above and below. I’ve got them two standard deviations above and below. We’ve currently moved above that upper Bollinger Band, which means you’re two standard deviations above the 200-day, which is an extended situation. I went back and looked at some of these situations previously and again, in May of 2023, it lasted for two months, as well as January 2024. You had another two and a half, three months higher, and then you got that correction into May. And then we had another one in the summer of 2024. We had that sharp correction into August. And then in November 2024, it lasted for several months, but then we got that February-March decline. So a top—again, you don’t say it’s tomorrow—but you do have to be careful here because we are in extended territory.
Jim Puplava:
I want to skip a couple of your charts and go to the Mag 7. There’s an index on that which covers it, and that’s been one of the big drivers of the S&P over the last couple of years. It looks like it’s taken off again. I’m looking at it—it’s in record territory, almost.
Art Hill:
Yeah, again, it’s in record territory. And the Mag 7, of course, is the big driver as far as the large caps are concerned. You did have some mixed performance coming in this week, with Meta moving sharply lower after earnings and Alphabet moving higher. Microsoft is down a little bit, and tomorrow we get Apple and Amazon. But as a whole, the Mag 7 are leading. Nvidia, of course, is strong overall, but they are powering the market and that’s what makes it so challenging to deal with breadth indicators that are not very inspiring when you have these top 7, 10, 15 stocks powering the market. If you look at the Mag 7 ETF, it got over 25% above its 200-day EMA in July 2024 and December 2024, and both of those instances gave way to a correction and even more into March-April 2025. But currently we’re not at that 25% level, but I would say we are in extended territory, and you’ve got to be careful here.
Jim Puplava:
How much, or how extended, can markets get before finally, I don’t know, traders come to the table and say, hey, it’s time to take some profits? Or maybe this is just getting too risky at this point. I mean, how much further can this go?
Art Hill:
Well, one thing I’m noticing is, and you saw this with gold, it was making a big move up in August and into September and then it had this really sharp two-week advance. And when you get these sharp advances after an extended uptrend, that’s kind of a sign of a blow-off top. Now, when I say top, I don’t mean like a bear market top and you’re going down for months or whatever. No, it can lead to an intermediate top or some sort of correction. And if you look at the run the Mag 7 had off of that early October low, it was extremely steep and sharp. This was after an extended run from mid-May into September. Then this run we had into late October was very sharp. So maybe that’s a sign of froth. Again, I’m not looking for a bear market, but I would think a correction is possible.
Jim Puplava:
Yeah, I’m just looking at that chart of gold. It’s gone past a 38% retracement. Looks like it could hit 50. How far do you think this correction goes?
Art Hill:
Well, corrections, I like to say, they’re kind of like a box of chocolates. You never know what you’re going to get. You could get a sharp decline like we saw with gold, moving from 4,400 down to 3,900 and then a rebound directly, or you could get a sideways consolidation, or you could get some sort of a zigzag lower. But if I look at previous moves with gold, you had an extended advance January into March, and then in April you had this big surge, like a 2, a 10-day surge from 2,095 up to around 2,400. It was that surge at the end of the advance that foreshadowed the correction. We went into a long trading range and then got a breakout there in August. Now we’ve had a surge and we’ve had this outsized decline. I think that signals at the very least we’re going to move sideways maybe and consolidate gains. But as I said, you never know what you’re going to get. Jim, I’m still bullish on gold longer term, and a typical correction will make 50% retracements, like two steps forward and one step back. So I am interested in gold in these areas. It might not be the exact bottom, but I think it’s a correction within an uptrend.
Jim Puplava:
Yeah, I mean, if you take a look at where gold has gone from the beginning of the year, at its peak it was up over 60%. So when you see something that parabolic, you know nothing goes straight up, you’re going to get some pullback here.
Art Hill:
True, very true.
Jim Puplava:
What’s your take on silver?
Art Hill:
Silver is pretty much going to follow gold. Silver is kind of like gold on steroids, if you will. So if gold’s going to go up 1%, silver is going to be up 1.5 to 2%. So it’s kind of in the same boat. Silver was even more parabolic during its advance in September and October. Now, of course, it’s worked off those excesses with a really sharp double-digit decline. But again, I think it’s a correction within a bigger uptrend.
Jim Puplava:
And let’s talk about one more other commodity which has been in the news, and that’s oil. What’s your take on oil?
Art Hill:
Oil is a tough one for me because I just don’t see that much trendiness, if you will. I see much more choppiness. I see more downtrend than uptrend. I look at spot crude and it’s below its falling 200-day moving average, and the 200-day moving average has been falling for over a year. So I am more bearish than bullish, definitely on oil. You got this oversold bounce in the middle, latter part of October. Yeah, maybe that could continue, but I think it’s a bear market bounce.
Jim Puplava:
Yeah, you take a look at even some of the bigger oil stocks like Exxon or some of the bigger ones. That’s all I get. It’s up and down, up and down, up and down. There’s no consistent trend here.
Art Hill:
Yeah, they’ve been very choppy. It’s just a sideways trading range for the last 12 to 15 months. Flat 200-day moving average.
Jim Puplava:
Well, let’s move on to interest rates. The Fed cut interest rates on Wednesday another quarter point. They’re hinting at, hey, maybe the next one isn’t quite guaranteed because the Street is expecting three cuts. We’ve got two of them, so there would be one more maybe in December, but we’ve got the 10-year and the 30-year backing up a bit.
Art Hill:
Yeah, we had a pretty good pop in the 10-year. It moved back above 4% with a sharp move higher. So I still think the bigger trend is down for the 10-year yield, and I would think the 200-day moving average has rolled over and turned down. So I think this again is a bounce within a bigger downtrend for the 10-year. Basically a knee-jerk reaction based on what Fed Chairman Powell said in his remarks. If I look at the 7- to 10-year Treasury Bond ETF, which is featured on the chart list that you guys are going to post on your website to go along with this podcast, IEF has been rising all year. Basically, it bottomed in January and has been working its way higher. Of course, it got hit this week, but it’s above its 200-day and its 200-day has turned up. So we could get a correction, definitely, but I’m still long-term bullish on the 7- to 10-year Treasury bond.
Jim Puplava:
ETF and going on currencies now. Taking a look, the dollar’s in a little bit of a rally mode here. It’s down from its peak; down to the bottom, it was down about 12%. What’s your take on the dollar and how that might relate to gold?
Art Hill:
The dollar is, it’s—well, I kind of just do the thing with the 200-day moving average. Your chances of a negative outcome are greater when you’re below the 200-day and when you’re below the falling 200-day. The chances of a positive outcome are better when you’re above the 200-day and you have a rising 200-day. The dollar index, yeah, it’s based out from July into September and it’s getting a bounce, but this is a bounce below the 200-day moving average. So I would think it would be a bear market bounce for the dollar. How it goes with gold—well, typically, when the dollar rises, that can weigh on gold. So yeah, if the dollar breaks its 200-day and the index gets above 101, then you have some signs that there might be a trend change afoot.
Jim Puplava:
So when you’re looking at this market, you know, beginning probably this summer, the market started to broaden out. You had some of the small caps picking up, but they’re still lagging. So has that broadening out stalled, in your opinion?
Art Hill:
Yeah, I think the broadening out has stalled. There are two charts that we’re looking at, Jim, and I’m showing them on your website. The first one is IWM, the Small Cap ETF. It did hit a 52-week high in October, and it’s in an uptrend and above its 200-day. But relative to large caps, it’s been lagging for years. It gets these little pops of relative strength—November-December 2023, July 2024, August-September 2025. But these are pops within a long-term downtrend. So small caps are still just not the place to be. I don’t see any long-term relative strength. Then when I look at those breadth charts I showed you, you look at the percentage of stocks above the 200-day. For the S&P, 557.6% of stocks roughly are above their 200-day. Okay, that’s net bullish, that’s above 50%. No problem, Jim. But that also means that like 42.5% are below their 200-day in long-term downtrends. That’s a sizable chunk of the market. This does have me concerned. If we go below 40%, then that’s a bearish signal. That means the vast majority are in downtrends. Another thing we’re seeing is, we saw a surge in new lows. New lows hit 40 yesterday within the S&P 500, and that’s the lowest reading since April. Prior to April, we had a plunge to 40 in early March, and that preceded the breakdown that we had into April. So there are some warning signs flashing out there as new lows increase and the percentage of stocks above the 200-day doesn’t look that healthy.
Jim Puplava:
Yeah, that was going to bring me to my next question. When you have stocks, whether it’s the MAG7, the NASDAQ or the S&P that’s this overextended, what do you do here as an investor? I mean, they’re still in an uptrend, and as you pointed out, there still may be more to come. But what do you do as an investor here?
Art Hill:
Well, I think you have to go with what is your signal and what is your trend. If you look at SPY, it’s in an uptrend. You look at the Qs, they’re in an uptrend. Tech is still leading, industrials are leading, XLI is leading—it’s near a new high and that’s largely in part from aerospace and defense. So I think you do still have to stick with the leaders, especially in the stock market. You have to be very selective. And yeah, you’re going to have to be very vigilant because if we start to see new lows expand below, say, 50 in the S&P 500—more than 10% of stocks making 52-week lows—or you see that percent above the 200-day start breaking down below 50%, then you probably want to get more defensive. But right now, I still think the cup is half full. Another thing I’m watching would be the triple-B yield spread, and that’s also a chart we have on the chart list. It’s still relatively narrow, and that tells me that we don’t have any signs of stress in the credit markets. If that starts to break out above its 200-day and above a prior high, then that will show signs of stress in the credit markets. So those are three things to watch as far as the market is concerned in the coming weeks. But you’ve got to be pretty vigilant, I think, in the next few weeks.
Jim Puplava:
And let’s talk about seasonality. Normally, when you get into November and December, those are some of the best months out of the year for the stock market—they call it the Santa Claus rally, whatever you want to call it. But seasonality-wise, you’re entering into a typically very strong part of the year for the market.
Art Hill:
It is definitely one of the strongest parts of the year. The other would be April and May, and, you know, historically when you’re up the first 10 months, the second two months tend to be strong. So I think seasonals are a tailwind. But when I rank seasonals as far as how I’m positioning myself as a trader or investor, they’re pretty far down the line. I’m looking at price action first and foremost for SPY and QQQ. I’m looking at those two breadth indicators. I’m looking at yield spreads, and I’m also looking at the relationship between stocks and bonds. Right now, stocks are outperforming bonds, so that’s risk on. As long as those things remain in place, I will stay bullish.
Jim Puplava:
Would you in any way take some defensive measures? Like, you know, you look at the price of puts right now—very cheap, obviously with the stock market going up. Would you add somewhat of a hedge here or would you just go with the trend or put protective stops in?
Art Hill:
I think a hedge is maybe not a bad idea given the froth that we are seeing and given the fact that the breadth indicators are not inspiring. But breadth has not been inspiring for several months, and the market just continues to push higher. But with the puts, you’ve got to get them, of course, before those premiums blow out and you have to pay too much. But if you want some peace of mind throughout the holidays, I think some protection puts might not be a bad idea into January, February.
Jim Puplava:
Is there anything when you’re looking at charts right now, whether it’s a sector, stocks or something that just stands out to you that—hey, this looks good?
Art Hill:
Well, I’m thinking that what looks great right now is—I would have to say industrials look real good. I think aerospace and defense looks good. It continues to lead. I’m also partial towards cybersecurity. You know, I see CrowdStrike breaking out of a cup with handle and hitting a new high. I see Zscaler doing the same thing. But you have to be very selective even within the industry groups and sectors, because even within the Mag 7 you see Meta got clobbered and I think they could be under pressure. Google, they could be the next $5 trillion company. It’s hard to believe that they are still valued less than Apple. So Google is just a machine that is clicking on all cylinders. Alphabet. Excuse me.
Jim Puplava:
Yeah. Okay. So in the meantime, stay with the trend. Maybe if you’re a little bit on the conservative side, you might want to put in a hedge while puts are cheap here. But otherwise, it looks like this trend is bound to continue.
Art Hill:
Well, I’m a trend follower by nature, and I wait till I get some sort of signal that tells me to be careful or to step aside. And yeah, there are some yellow flags out there, but they have yet to turn into those red flags. You’ll see on these charts that are posted on your website, I put some levels out there to watch for those red flags.
Jim Puplava:
All right, well, listeners, we’ve been talking about a lot of charts and Art has been kind enough to post them. We’re going to post them on our site. So if you’re listening to this program, go to the website, call up the charts, and you can follow along with this conversation. Art, as always, it’s a pleasure having you on the program. You have a great rest of the year, and thanks for coming on.
Art Hill:
All right, Jim, thanks for having me. And you guys have a great year-end. We’re still a ways away, but have a great year-end.
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