Beverly Hills RS Institute: Register to join us in person for a 3-hour educational symposium on relative strength investing. This event is for financial advisors and will offer 3 hours of CFP/CIMA credit.

When: November 12, 2025, 9 AM EST - 12 PM PST

Where: Gallery A at The W Los Angeles - West Beverly Hills 930 Hilgard Avenue, Los Angeles, CA

Who: Speakers include...

John Lewis, CMT, Senior Portfolio Manager; Andy Hyer, CFP, CIMA, CMT, Client Portfolio Manager; Ian Saunders, Senior Research Analyst

Cost: Free! Lunch will also be provided.

Registration is limited to the first 75 advisors, so be sure to act fast!

Click Here to Register!

Friday’s action saw the S&P 500 decline over 2.5%, its largest single day decline since tariff induced volatility of early April. It goes without saying that large drops are “scary” as clients call in and see red across their portfolio, but it is important to remember that markets do take normal exhales from time to time… even during overwhelmingly strong market environments. With that said, the decline gives us the ability to comb through the market and find technically strong stocks “on-sale” that you can add to your portfolio. If you read or listen to NDW research quite often, the team frequently preaches the need for “normalization” for strong stocks. In fact, our recent Pulse in 10/10’s Daily Equity Report discussed our primary indicator to judge a stock’s near-term positioning, that being the Weekly Overbought/Oversold reading. We won’t focus on that more today, but the point is that multi-percent decline days typically ring in normalization.

Using the security screener, we can focus in on S&P 500 stocks that have moved back into O’s on their default PnF chart over the last 2 days. This will isolate stocks that have “pulled back” meaningfully. From there, we can add a handful of additional filters, detailed below. By focusing on 4 and 5 attribute stocks that aren’t “overbought” by NDW standards anymore and maintain a pair of buy signals, we produce a list of 22 stocks you could look towards after Friday’s exhale. Today’s piece will focus on three of them.

Monolithic Power Systems Inc. (MPWR)

All of the stocks we will focus on today will have strong technical pictures. MPWR fits the bill, earning all five technical attributes as of 10/13/25. After breaking to new all-time highs to open October, the stock pulled back into more actionable territory following Friday’s action and offers an attractive entry point at/around current levels. In terms of support nearby, MPWR is within earshot of support at $880… which is also around the middle of the 10-week trading band and old resistance from earlier this summer.

GE Aerospace (GE)

GE has nearly doubled so far in 2025, sitting on a string of 5 consecutive buy signals on its default chart. The perfect 5/5’er has run into some resistance at all-time chart highs around $304, pulling back towards support at $292. Even if further downside was in store, the sell signal would technically flag as a bullish shakeout formation, adding to the weight of the evidence for the name. Below $292, bulls could step in around $280- old resistance and the middle of the trading band.

Cincinnati Financial Corporation (CINF)

Broader financials remain a standout within NDWs broader rankings as we sit roughly halfway through October. Insurance names were a standout in 2024, but the group has petered out in 2025. Broader representative IAK remains technically acceptable by NDW standards… but does lag behind more traditional finance names. CINF is a standout within the insurance space, earning a 4/5 TA score as it pulls back off all-time highs. A range of old resistance in the mid-$150’s could act as new support in the near-term.  

Friday was brutal for equities, seeing the S&P 500 (SPX) fall 2.7%—its worst single-day drop since the height of tariff concerns on April 10th. Tariffs continue to be a thorn in the market’s side, with Friday’s decline driven by news of a potential 100% tariff on China as trade talks continue. Fortunately, positive comments over the weekend saw the market recoup some of its losses on Monday. While headline movements like Friday’s selloff grab attention, understanding underlying strength requires a deeper look into the market’s health, which is where indicators come into play.

The NDW team utilizes participation indicators to identify whether movement higher or lower is broad based or coming at the hand of just a few names. Higher levels mean more stocks are “participating” or contributing to upward price action, which is a net positive for markets. Meanwhile, lower levels or a decrease in participation can signal weakening of strength. Downward action over the last week triggered notable shifts not only within major indices but also across many of our indicators.

Among the most sensitive metrics NDW regularly uses are the Ten Week indicators, which look at the percentage of stocks in a universe trading above their ten week moving average. The indicator is often the first domino to fall within our participation indicators but is more prone to head fakes given its sensitivity. Looking at the Ten Week for the S&P 500 (^TWSPX), it has gradually fallen from its heights in the upper 70s before moving sharply lower here in October. Prior to last week, TWSPX had stayed above 50% since May, with our current levels at 36% last seen in April of this year. Currently, the indicator is in “no man’s land,” as returns in this area can be muted. However, movement below 30 or 20 would be a sign the market is approaching washed out territory.

Due to their sensitivity, short-term indicators can signal initial change but gain more significance when confirmed by the movement of intermediate-term indicators. To evaluate intermediate-term participation, NDW uses “bullish percent” charts (BPs), which measure the percentage of stocks in a universe trading on a PnF buy signal. Similar to TWSPX, the bullish percent for the S&P 500 (^BPSPX) was slowly moving lower since peaking in July, with it falling even further over the last week. However, the overall levels for the indicator remain above 50%, meaning that a majority of the S&P 500 still trades on a buy signal. Given that things were in slightly elevated territory above 70%, some pullback from that range should have been expected, with our current position in healthy territory for now.

To confirm the movement of intermediate-term indicators, we compare them to the movement of long-term indicators. To evaluate longer-term participation, NDW uses the Positive Trend indicators (PTs), measuring the percentage of stocks trading in a positive trend on their PnF chart. Unlike BPSPX, the positive trend percent for the S&P 500 (^PTSPX) held relatively steady after pushing north of 70% in July. Even with recent action, the indicator has yet to reverse into a column of Os but is less than 1% away from doing so. Historically, environments around current levels have been constructive for equities. Most of the market’s gains occur when PTSPX is above 50%, and readings north of 60% are generally more positive, which is a positive sign for the market’s outlook.

Overall, the state of participation remains positive for domestic equities, particularly in long-term indicators. However, there are some initial signs of weakness as participation is moving in the wrong direction. With some cracks starting to form, the market’s ability to hold or improve current levels will be a crucial factor in whether we see a strong close to 2025.

Daily Option Ideas for October 13, 2025