Basket 2 tells you what price is doing independent of your fundamental view. Price can be right when your analysis is wrong.

Trend:

• Price above 200 DMA: Bullish trend
• Price below 200 DMA: Bearish trend
• 50 DMA crossing 200 DMA: Gold (GLD)en/Death cross signals

Breadth:

• Advance/Decline Line: Are most stocks participating?
• % Above 200 DMA: Healthy market = >60% above
• New Highs vs New Lows: Bull market = more highs

Weak breadth + strong index = divergence warning. Narrow leadership eventually fails.

Momentum:

• RSI: >70 overbought, <30 oversold
• MACD: Trend direction and crossovers
• Rate of Change: Acceleration/deceleration

Key Levels:

• Major moving averages (50, 100, 200 day)
• Prior highs/lows
• Round numbers (psychological)
• Volume profile (where trading concentrated)

Bitcoin (BTCUSD) as a Liquidity Proxy:

BTC (BTCUSD) often leads equities by 1-3 weeks on liquidity moves. It's more sensitive to global liquidity than SPX. When BTC (BTCUSD) breaks out while SPX consolidates, expect SPX to follow.