MW Here's a very unusual chart. But it makes a good point about the market right now.

By Jamie Chisholm

Sometimes it's good to analyze things from a different perspective.

In a Tuesday note, BTIG's Jonathan Krinsky presented the chart shown below as an aid to explain his somewhat bearish take on the stock market right now.

The chart showed an asset that has jumped sharply off recent lows and moved above its 200-day moving average, which may now provide support. The asset price has seen some profit taking but will likely also find support around the dotted channel illustrated.

"Would you buy the chart below with a defined stop?" he asked. "By our work, the answer is yes."

Except the image is of an inverted S&P 500 SPX (ES00).

"Sometimes flipping the same chart you look at every day can change perspective," Krinsky said. "So if we would buy the inverted chart, of course that means we would sell the normal SPX as we approach resistance with a defined stop."

Krinsky admitted the S&P 500 may see a bit more upside, as it perhaps looks to "gap fill" at around 5,571. Beyond that, though, the resistance highlighted comes into play.

"Until/unless that can be reclaimed, we continue to view this as a range-bound market and would lighten up as we approach 5,600," he added.

What would cause a change to that view? "If we were buying the inverted chart, a move below the base breakout would likely invalidate our thesis. Therefore, a few days above about 5,700 would cause us to at least reconsider the 'range bound' idea," he said.

Meanwhile, Krinsky took a more traditional approach to the analysis of how the software sector, represented by the iShares Expanded Tech-Software Sector ETF IGV, has recently been outperforming.

Software, he said, "is showing impressive relative strength [versus the S&P 500], and especially semis. We see little reason to fade that trend."

-Jamie Chisholm

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April 29, 2025 09:33 ET (13:33 GMT)

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