This past Friday, we hosted our monthly live webinar exclusively for CappThesis institutional and professional subscribers. As always, we reviewed a wide range of market dynamics using nearly 100 slides, including:
📊 Market statistics and positioning
📆 Seasonal trends
⚖️ Volatility measures
🌐 Market breadth indicators
🧠 Investor sentiment
🕰️ Short- and long-term charts across equities, rates, commodities, and currencies
The session concluded with an interactive Q&A.
🚨 A Notable Shift in Our Five-Factor Framework
While we cover a lot of ground in the long-form webinars, one topic stood out this month: the CappThesis Five-Factor Framework for identifying whether we’re in a durable market uptrend.
These five traits are not based on hunches, headlines, or hope.
✅ They are data-driven & objective.
This framework helped us stay in sync with the equity market’s uptrend from the October 2023 low through early 2025, and it also helped navigate the 2022 bear market, where the same indicators showed persistent deterioration.
But this month marked a notable change: for the first time in 18 months, as the five traits failed to align.
This dislocation doesn’t guarantee a reversal—but it is a critical signal that deserves attention.
📐 Zooming In: Bullish Patterns Have Been Failing
Let’s take a closer look at just one of the five traits:
🔍 The presence of successful bullish technical patterns.
What defines a “successful” pattern in our work?
📈 A clean breakout from a clear base or range
🔒 A retest that holds above the breakout zone
🎯 A target price that is reached
It’s straightforward—but as we often remind clients: Simple ≠ Easy.
From Oct 2023 through Dec 2024, the S&P 500 posted 11 straight successful bullish patterns.
Since late Dec 2024?
❌ Four consecutive failures.
Here’s one of them:
🧭 What Failed Breakouts Tell Us
When bullish breakouts begin to fail, it tells us something important:
📉 Traders have no longer been willing to buy strength.
⚠️ Momentum strategies haven’t work well.
🕰️ Patience and selectivity have become more popular.
It’s a different market tone—and we need to recognize it.
👉 The key question now: Is this just a short-term reset within a broader uptrend, or are we witnessing the early stages of a more significant regime shift?
The first step in getting back to uptrending ways would be seeing a bullish pattern work. The SPX has another chance to do just that with this potential cup and handle pattern to start the week.
