Last month, I wrote about the potential danger investors face when their emotions lead the way. In that article, I highlighted how fear-driven media headlines can prompt premature decisions–like selling some or all of one’s investments at the wrong time. But emotional missteps don’t stop there. Sitting on the sidelines while the market climbs is another way emotions can betray investors. I believe the antidote to this dilemma is to get technical. To illustrate, let’s take a closer look at Bitcoin, Gold, and the S&P 500 Index.

What would you think if I told you that all three share a single, unifying characteristic? It might sound unlikely–after all, one is a digital asset, one a tangible commodity, and the other a financial instrument. But believe it or not, they do. Each one trades according to an underlying trend. Let’s explore this idea further, starting with Bitcoin.

 

Chart courtesy of StockCharts.com, Data as of 11/5/25

 

There’s no shortage of opinions surrounding cryptocurrencies like Bitcoin. But when we shift our focus to technical analysis, a clearer picture emerges–one of underlying, consistent behavior shaped by trends. Since late 2014, despite all the hype, Bitcoin has followed a recognizable pattern: an initial rising trend, followed by a prolonged period of sideways consolidation, and more recently, another upward trend. I introduced the concept of three primary trends in Chapter 1 of my book, Protecting The Pig. Having seen that a “new age” digital asset like Bitcoin adheres to trend behavior, let’s now turn our attention to an “old school” commodity relic: gold.

 

Chart courtesy of StockCharts.com, Data as of 11/5/25

 

For more than two decades, even a traditional commodity like gold has demonstrated clear trend behavior. Over the period shown, gold experienced a strong rising trend, followed by a multi-year phase of sideways consolidation, and more recently, a sharp resurgence into another steep rising trend. Now, let’s turn our attention to a financial asset–the S&P 500 Index–and see what patterns emerge there.

 

Chart courtesy of StockCharts.com, Data as of 11/7/25

 

If you are a client, have read my book, or have followed my articles for any length of time, you probably expected what we’d find. My personal research has consistently found that every publicly traded investment – almost without exception – moves within one of three types of trends. In the case of the S&P 500 Index, the current trend has been a steadily rising trend since before 2011. More specifically, this rising trend has unfolded within a well-defined trend channel, much like gold in recent years and Bitcoin–at least until its recent deviation.

The goal of this article is to help shift your perspective – so you can reduce the likelihood of making emotionally driven decisions that may lead to financial loss. When we focus on the market’s behavior through the lens of its primary trend, rather than reacting to media headlines, we give ourselves a much better chance of making profitable, rather than costly, investment decisions. If you’ve read this far, you might be wondering: “How can technical analysis help identify when a market trend is changing?” That brings us to the answer–the Blue Line–which I’ve updated each month in these articles over the past decade.

 

STOCK MARKET, WATCHING FOR THE SUMMIT:

Chart courtesy of StockCharts.com, Data as of 10/31/25

 

The S&P finished the month of October 10.1% above the Blue Line, compared to 10.0% above the Blue Line at the end of September. If the past 100 years of stock market behavior continues the same into the future, the top will come when price falls below and remains below the Blue Line.

This is the central purpose of the BLUE LINE INVESTINGÒ Strategy–to help investors protect their gains when a rising trend begins to shift into a declining one. With each passing year, I believe we’re moving closer to that turning point. Until it arrives, this strategy will continue to rely on technical analysis–not headlines–to guide decision making.

 

Jeff Link

Portfolio Manager

 

 

Disclaimers:

The BLUE LINE INVESTING® (BLI) investment process was founded on over 95 years of stock market history. It seeks to identify and align investment decisions with multiyear trends. Various aspects of this process have been illustrated in my book Protecting The Pig: How Stock Market Trends Reveal the Way to Grow and Preserve Your Wealth.

The S&P 500 Index is one of the most commonly followed equity indices, and many consider it one of the best representations of the U.S. stock market, and a bellwether for the U.S. economy. It is comprised of 500 large companies having common stock listed on the NYSE or NASDAQ. The volatility (beta) of the account may be greater or less than the index. It is not possible to invest directly in this index.

Technical analysis is a method of evaluating securities by analyzing statistics generated by market activity, such as past prices and volumes. Technical analysis attempts to predict a future stock price or direction based on market trends. The assumption is that the market follows discernible patterns and if these patterns can be identified then a prediction can be made. The risk is that markets may not always follow patterns. There are certain limitations to technical analysis research, such as the calculation results being impacted by changes in security price during periods of market volatility. Technical analysis is one of many indicators that may be used to analyze market data for investing purposes and should not be considered a guaranteed prediction of market activity. The opinions expressed are those of BLI. The opinions referenced are as of the date of publication and are subject to change without notice. BLI reserves the right to modify its current investment strategies based on changing market dynamics or client needs. 

Past performance is not indicative of future results. This material is not financial advice or an offer to sell any product. The information contained herein should not be considered a recommendation to purchase or sell any particular security. Forward-looking statements cannot be guaranteed.

Investment advisory services offered through Guardian Wealth Advisors, LLC D/B/A Blue Line Investing. Guardian Wealth Advisors, LLC (“GWA”) is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about GWA’s investment advisory services can be found in its Form CRS or Form ADV Part 2, which is available upon request.

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