The TML Report February 13, 20125 – Divergence Continues

Market Overview

The NASDAQ has ultimately been moving sideways since the end of October 2025, although its range has been slowly narrowing. The tech-heavy index continues to trade below all of its declining key moving averages, other than its 200-day SMA, yet it remains above its November 21st, 2025 swing low.

The S&P 500 is in better shape than the NASDAQ on a relative basis, but at the end of the day, Friday was its second day living below all of its declining key moving averages except for its 200-day SMA. Notably, it has also fallen below its high on October 29th, 2025.

The Russell 2000 and Dow continue to maintain healthy uptrends, as their series of higher highs and higher lows since their November 20, 2025, swing lows remains in place.

The divergence not only persists among the major indexes, but among the market’s leadership. On the one hand, we’ve seen money moving into defensive areas of the market, such as consumer staples, utilities, oil and gas, miners, and low-volatility stocks that pay quarterly dividends.

On the other hand, there are still plenty of sound setups to be found among the markets’ traditional’ groups of high-growth stocks, namely across the technology and medical/healthcare sectors

As position traders looking to take concentrated positions in just a few names, the current environment is not conducive. Hence, minimal exposure is ideal until conditions improve, even if that means cash.

Indexes

QQQ

The Nasdaq continues to struggle below significant resistance, yet it has maintained its pattern of higher lows.

SPY

The S&P 500 is holding up much better than the Nasdaq on a relative basis, but has fallen back below its October 29th high and all of its key moving averages other than the 200 ASMA.

IWM

The Russell 2000 has been consolidating constructively above its prior consolidation and 50-day SMA, Despite the pickup in volatility over the last couple of weeks.

DIA

The Dow continues to slowly trend higher above its key moving averages, maintaining its pattern of higher highs and higher lows.

Focus List

ASML

ASML has tightened up constructively above its 21-day SMA over the last few weeks and looks like it's setting up to head higher.

LRCX

LRCX goes hand in hand with ASML and is setting up in a similar manner. However, it is a more volatile stock.

SNDK

SNDK is a prominent leader in the memory space, which continues to exhibit extreme relative strength as it consolidates above its short-term 10-day SMA. Watching SNDK for a breakout.

MU

MU is a leading name in the memory space that is setting up constructively above its short-term moving averages. Watching MU for a breakout higher.

ONTO

ONTO continues to consolidate constructively, slightly below its 52-week high, and more importantly is setting up for a green line breakout above its July 2024 prior all-time high, which you can easily see on its monthly chart.

UI

UI has moved powerfully up the right side of its current base and then consolidated in a tight range over the last few days, where it looks like it's setting up to head higher.

PL

Watching PL for a potential entry versus its 50-day SMA and/or on a breakout above its declining tops line and key moving averages.

ATRO

ATRO has been consolidated constructively in a tight range above its 23-day EMA over the last few weeks, where it looks like it's setting up to head higher.

PACS

Watching PACS for a potential entry versus its 50-day SMA and/or on a breakout above its declining tops trend line.

INDV

Watching INDV for a breakout above key resistance.

strl

Watching STRL for a potential entry on constructive weakness in and around its prior all-time high.