FX Evolution: You Won’t Believe What Retail Traders Did This Week

Markets have started the year trending higher, fueled in part by signs of moderating inflation. That’s allowed the market structure to show a better sign of strength. And it reverses the potential selloff signals that stocks were giving in the final weeks of 2024.

While the Santa Claus rally failed to materialize, stocks were up in the first 5 trading days of 2025. And are on track to end January stronger. Both moves point to an up year.

Reads such as improving breadth and moving average convergence/divergence also point to markets closing 2025 higher.

In fact, the stock market just presented a signal it last hit in 1928. It just recorded five straight days of at least 68% breadth. That means two out of three stocks moved higher. That’s a much healthier sign than a market dominated by a few large-cap tech stocks.

Of course, 1928 was the last full year of a bull market before the start of a bear market in late 1929. So traders will want to be mindful that stocks may have more upside this year, but not indefinitely into the future.

However, January’s market moves also indicate that stocks will likely be volatile. And traders and investors alike should be prepared for a correction in the 10% range. For now, the trend is back to bullish.

To see the full technical analysis on the market right now, click here.