Chart of the Day - Tuesday, July 29, 2025

🏆 Today's Chart of the Day was shared by Frank Cappelleri (@FrankCappelleri). 
 

• After six consecutive record highs, the S&P 500 finally took a breather today, falling -0.3% as Mega-Cap earnings and the Fed loom this week. Frank notes that $SPY has formed its third Rising Wedge since April.
   
• This bearish formation is notoriously unreliable. After analyzing thousands of chart patterns, one of the authorities on the subject, Tom Bulkowski, concluded, "Rising wedges are some of the worst-performing chart patterns. Downward breakouts have unacceptably high failure rates and small post-breakout declines."
   
• The previous two failed to produce a meaningful decline, and sentiment remains far from euphoric. After polling the crowd on FinTwit, Frank notes that the majority expects a double-digit decline before another double-digit gain.

The Takeaway: The S&P 500 is testing the lower bounds of a Rising Wedge. However, this bearish pattern rarely works, and sentiment remains skeptical of the rally.