It’s no secret that the S&P Equal Dollar Weighted Index (SPXEWI) has lagged the cap-weighted S&P 500 Index (SPX) over the last few years and while there have been some brief periods of equal-weight outperformance, it has usually been short-lived. Exceptionally high market concentration and outsized contributions by a handful of names have been a defining feature of the market this decade and this has only accelerated in recent years. Looking at the line RS chart between the SPXEWI and SPX, the equal-weight representative has given up all its outperformance since 2003 after peaking in 2015. While this may bring up thoughts of opportunity for the equal weight index to outperform moving forward, the RS relationship has plenty of room to move lower based on historical data. The all-time low for SPXEWI vs SPX was in March 2000 (with data starting in 1990).

Moving onto the point and figure relative strength chart between SPXEWI and SPX on a 1.625% scale, we can see roughly the same picture as the RS line chart but with more discernable information. We can clearly see that the RS relationship has moved below its 2008 low as well as which index is in control on a long-term (signal) and short-term (column) basis. It also becomes clear how far off we still are from those March 2000 levels on this chart. This isn’t to say we’re bound to get back to March 2000 levels, but it lets us know that it isn’t outside the realm of historical possibilities on a long-term basis. One of the biggest advantages of point and figure charting is that it distills price and relative strength movements down into relevant and important information. This comes with some up-front costs of learning the basics of point and figure charting which most clients simply do not have the time or means to do so. Therefore, presenting the information in a less daunting light through other chart types, like a line chart, is an easy way to convey the message of your process without losing your client along the way.

At its core, the US economy is almost entirely built around the consumer. How (and sometimes more importantly, where) people spend their money can offer unique insights into the state of the market. After all, when people are optimistic about their future earnings potential, they are more likely to splurge on excess/luxury goods. On the other hand, a more cautious consumer is more likely to forgo a morning cup of coffee or new pair of shoes until the overall economic picture gets a bit more clear. There is certainly an argument that consumer spending is being artificially propped up by higher income earners or credit card debt… an idea that us chartists won’t touch on today. Regardless, this week’s suite of earnings releases gives us an opportunity to look across the retail space and gauge just how consumers are spending their hard-earned cash.

The big retailers on the docket for this week are Target TGT & Walmart WMT, both of which provide valuable insight into where (and how) everyday shoppers are buying their everyday essentials. Historically speaking, there has been a “if not one than the other” relationship between the two, with Walmart acting as more of a true discounter while Target represented more of an “upscale budgeter” friendly location. Over the past few years, this explicit relationship has tailed off as TGT has struggled mightily, announcing as of their most recent earnings call plans to usher in a new CEO towards the start of 2026. Despite trying to put in a meaningful bottom in the high $80’s-low $90’s, the overall technical picture has been (and remains) quite bleak. In fact, TGT hasn’t earned a TA score of 4 (technically strong) or above since 5/24/2022. Since that point, it has shed nearly 30%, underperforming SPX by over 90% over the same timeframe. Ahead of WMT earnings 8/21, this conversation also provides an opportunity to introduce stock comparison via RS charts…. TGT has been on an RS sell signal on a 3.25% chart against WMT since late 2021. There will be some of you who will look at the current picture and assume TGT trades at a relative “discount” to other competitors. Trend followers know that underperformance trends can persist much longer than any one investor with a perceived value hunch can stay solvent.

Groceries aren’t the only area of the market that drives consumer spending. Homeowners are more likely to put up with an old dishwasher or washing machine when paychecks don’t stretch as far. On the other hand, strong economic prospects make it a bit easier to justify that DIY pavilion covering your grill out back. With that said, we can also look at recent results for Lowe’s LOW & Home Depot HD to peak behind the curtain as to how those names are doing. According to the WSJ, major takeaways from earnings for the major home improvement names were that homeowners are taking on more small projects but perhaps are putting off larger ones. Furthermore, possible tariff implications are still of interest on the supply side and will be a point to watch going forward.

From a technical perspective, both LOW & HD opened higher before journeying lower alongside the market throughout 8/20. Both names have very similar technical pictures, earning 2/5 technical attributes at the time of this writing. Despite this, the near-term picture has improved, seeing both names break back into a positive trend and post consecutive buy signals. Airing on the side of caution via the technical attribute scores, exposure should be limited for both names… but both remain options to keep on the backburner if continued improvement is in store as both aim to catch back up to the market in 2025.  

Each week the analysts at NDW review and comment on all major asset classes in the global markets. Shown below is the summary or snapshot of the primary technical indicators we follow for multiple areas. Should there be changes mid-week we will certainly bring these to your attention via the report.

Remember, these are technical comments only. Just as you must be aware of fundamental data for the stocks we recommend based on technical criteria in the report, so too must you be aware of important data regarding delivery, market moving government releases, and other factors that may influence commodity pricing. We try to limit our technical comments to the most actively traded contracts in advance of delivery, but some contracts trade actively right up to delivery while others taper off well in advance. Be sure you check your dates before trading these contracts. For questions regarding this section or additional coverage of commodities email james.west@nasdaq.com.

Data represented in the table below is through 08/19/25:

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