Major U.S. indices advanced modestly last week, with most tacking on 0.5% or less. This suggests expectations for lower corporate taxes and fewer regulations from a Trump presidency may be fully priced into the market.  If this is indeed the case, I believe it will open the door for a period of seasonal weakness during the first quarter, similar to the one we saw last year, which resulted in an almost 19% decline in the broader market S&P 500 from the Dec. 29 high to the Feb. 11 low. #-ad_banner-#From a sector standpoint, the market was essentially split down the… Read More

Major U.S. indices advanced modestly last week, with most tacking on 0.5% or less. This suggests expectations for lower corporate taxes and fewer regulations from a Trump presidency may be fully priced into the market.  If this is indeed the case, I believe it will open the door for a period of seasonal weakness during the first quarter, similar to the one we saw last year, which resulted in an almost 19% decline in the broader market S&P 500 from the Dec. 29 high to the Feb. 11 low. #-ad_banner-#From a sector standpoint, the market was essentially split down the middle last week, indicating investor indecision. Financials, technology, industrials and utilities outperformed the S&P 500, while real estate, materials, health care, energy, and consumer discretionary underperformed.  Keep Watching Overhead Resistance In last week’s Market Outlook, I pointed out that the Dow Jones Transportation Average was testing major overhead resistance at its 9,310 November 2014 high. I said that as long as this level continued to hold, it suggested the correction I’ve been expecting may finally be beginning. This week’s first chart shows the NYSE Composite also recently tested and failed to break overhead resistance at its 11,255 May 2015… Read More

The post-election rally stalled last week, following the prior week’s big advance. While most major U.S. indices closed relatively unchanged, the small-cap Russell 2000 was the exception. After hitting a high of 1,393 on Dec. 9, essentially meeting the 1,400 upside target I initiated in June, the index fell 1.7% last week. #-ad_banner-#Interestingly, all sectors of the S&P 500 finished last week in negative territory except for health care (+1.1%), utilities (+0.9%) and consumer staples (+0.02%), which are all defensive sectors. This was a complete reversal of the previous week’s broad-based rally. This internal weakness warns that a deeper decline… Read More

The post-election rally stalled last week, following the prior week’s big advance. While most major U.S. indices closed relatively unchanged, the small-cap Russell 2000 was the exception. After hitting a high of 1,393 on Dec. 9, essentially meeting the 1,400 upside target I initiated in June, the index fell 1.7% last week. #-ad_banner-#Interestingly, all sectors of the S&P 500 finished last week in negative territory except for health care (+1.1%), utilities (+0.9%) and consumer staples (+0.02%), which are all defensive sectors. This was a complete reversal of the previous week’s broad-based rally. This internal weakness warns that a deeper decline may be coming between now and early next year. Another Sign The Market Is Too Complacent In last week’s Market Outlook, I discussed the potential for an additional 3% rise in the Dow Jones Industrial Average to 20,400 before historically weak January/February seasonality kicks in. But I also pointed out that the market remains too complacent, according to the Volatility S&P 500 (VIX), for it to go much higher without a pullback first. This week’s first chart shows that put-to-call ratios are corroborating the extreme complacency in the VIX. The lower panel plots the 5-day moving average of the… Read More

Editor’s Note: Before you get to this week’s Market Outlook, there is a two-part investment strategy that has delivered extra payouts of $365, $520, $700 and even $1,000 to investors in addition to dividends and capital gains. The next payout could be worth as much as $500, and it’s available in the next 48 hours. Of course, there are a few restrictions, but it’s highly likely you qualify for this program. To see if you qualify for it, click here. After a one-week breather, the U.S. stock market resumed its post-election romp last week, with many… Read More

Editor’s Note: Before you get to this week’s Market Outlook, there is a two-part investment strategy that has delivered extra payouts of $365, $520, $700 and even $1,000 to investors in addition to dividends and capital gains. The next payout could be worth as much as $500, and it’s available in the next 48 hours. Of course, there are a few restrictions, but it’s highly likely you qualify for this program. To see if you qualify for it, click here. After a one-week breather, the U.S. stock market resumed its post-election romp last week, with many indices setting new all-time highs. The rally was led by the small-cap Russell 2000 (5.6%) and tech-heavy Nasdaq 100 (3.3%).   The advance was driven by expectations that a Trump presidency will be extremely favorable to U.S. businesses, with the loosening of government regulations and dismantling of Dodd-Frank being two expected changes. Last week’s rally was about as broad-based as they come. Every sector of the S&P 500 ended the week deep in positive territory, led by financials (4.9%), technology (4.2%) and real estate (3.8%).   Dow Industrials Closing In On 20,400 Target In last week’s Market Outlook, I… Read More

Editor’s Note: In the past year, one expert has used market pullbacks similar to the one John is predicting to capture huge returns in a matter of days. These include 62.4% in nine days, 33.8% in four days and 18.5% in a single day. As you read John’s report, consider how this strategy could help you get positioned for the next market sell-off. Stocks took a breather this past week following three consecutive weekly gains in the major indices. The decline was led by the tech-heavy Nasdaq 100 (-2.7%) and small-cap Russell 200 (-2.4%), which were both leaders… Read More

Editor’s Note: In the past year, one expert has used market pullbacks similar to the one John is predicting to capture huge returns in a matter of days. These include 62.4% in nine days, 33.8% in four days and 18.5% in a single day. As you read John’s report, consider how this strategy could help you get positioned for the next market sell-off. Stocks took a breather this past week following three consecutive weekly gains in the major indices. The decline was led by the tech-heavy Nasdaq 100 (-2.7%) and small-cap Russell 200 (-2.4%), which were both leaders on the way up. #-ad_banner-#One catalyst for last week’s decline was yet another failed attempt by the Nasdaq 100 to remain above its March 2000 tech-bubble high, which it has been negotiating since August. I’ll talk about this in more detail later in the report. From a sector standpoint, all sectors of the S&P 500 ended in negative territory for the week except financials, energy, materials and industrials. Much, if not all of this, was related to the recent spike in long-term interest rates, which has boosted financial stocks while driving investors into hard assets as a hedge against what… Read More

The U.S. stock market posted its third consecutive weekly gain last week, led once again by the small-cap Russell 2000, which added 2.4% to bring its year-to-date gains to a whopping 18.6%. To put that in perspective, the next best performer is the Dow Jones Industrial Average with a 9.9% gain for the year. #-ad_banner-#Last week’s advance was broad-based with all sectors of the S&P 500 except for health care (-0.3%) finishing in positive territory. It was led by materials (2.6%) and industrials (2.3%). For the year, energy (20.6%) and industrials (18.3%) have been the best performers, while real estate… Read More

The U.S. stock market posted its third consecutive weekly gain last week, led once again by the small-cap Russell 2000, which added 2.4% to bring its year-to-date gains to a whopping 18.6%. To put that in perspective, the next best performer is the Dow Jones Industrial Average with a 9.9% gain for the year. #-ad_banner-#Last week’s advance was broad-based with all sectors of the S&P 500 except for health care (-0.3%) finishing in positive territory. It was led by materials (2.6%) and industrials (2.3%). For the year, energy (20.6%) and industrials (18.3%) have been the best performers, while real estate (-3.6%) and health care (-3.5%) are bringing up the rear. According to Asbury Research’s ETF-based metric, the biggest inflows on a percentage basis over the past week went into consumer discretionary, while the biggest outflows were from consumer staples. If this trend continues, it bodes well for upcoming relative outperformance of the consumer discretionary sector into early 2017. New Highs And Unmet Targets Are Intermediate-Term Bullish The benchmark S&P 500 broke overhead resistance at 2,194 last week, hitting new all-time highs. However, the bellwether Dow industrials, which rose 1.5% last week, are still 6.5% below my 20,400… Read More

The major U.S. indices extended the previous week’s huge post-election gains, led by the small-cap Russell 2000 (2.6%) and tech-heavy Nasdaq 100 (1.2%). Although the S&P 500 only added 0.8%, the modest advance was broad based, with all sectors of the index posting gains except health care and consumer staples. Financial, energy and consumer discretionary stocks were the week’s best performers. The focus of this holiday-shortened week will be two housing-related reports and the minutes of the early November Federal Open Market Committee meeting. Investors will be poring over the minutes on Wednesday afternoon for clues as to whether the… Read More

The major U.S. indices extended the previous week’s huge post-election gains, led by the small-cap Russell 2000 (2.6%) and tech-heavy Nasdaq 100 (1.2%). Although the S&P 500 only added 0.8%, the modest advance was broad based, with all sectors of the index posting gains except health care and consumer staples. Financial, energy and consumer discretionary stocks were the week’s best performers. The focus of this holiday-shortened week will be two housing-related reports and the minutes of the early November Federal Open Market Committee meeting. Investors will be poring over the minutes on Wednesday afternoon for clues as to whether the Federal Reserve will hike short-term interest rates at the Dec. 13-14 meeting. In last week’s Market Outlook, I pointed out that the post-election rally positioned the benchmark S&P 500 index just below overhead resistance at 2,180 to 2,194. That resistance is officially being tested, but it will take a sustained rise above it to confirm the broader market’s next leg higher is underway. Investor Asset Flows Testing Important Threshold One of the few market metrics that actually leads price sometimes is investor asset flows. And the latest asset flows data in the SPDR Dow Jones Industrial Average ETF (NYSE: DIA)… Read More

In one of the strangest weeks for the markets that I can remember, the major indices collapsed during the overnight session on election night, with the S&P 500 plummeting 5% at one point, before staging a huge bullish reversal on Nov. 9. From there, the market just kept going, and… Read More

In last week’s report, I identified 2,121 as a key level to watch in the benchmark S&P 500, saying a breakdown below that level would clear the way for a deeper decline as we headed into Election Day. That is precisely what happened last week, as the major indices logged another weekly decline, led down by the Nasdaq 100 (-3%) and Russell 2000 (-2%).   Last week’s weakness was broad-based, with every sector of the S&P 500 finishing lower. The poorest performers were technology (-2.7%) and energy (-2.3%). We are at a major decision point where investors must draw some longer-term… Read More

In last week’s report, I identified 2,121 as a key level to watch in the benchmark S&P 500, saying a breakdown below that level would clear the way for a deeper decline as we headed into Election Day. That is precisely what happened last week, as the major indices logged another weekly decline, led down by the Nasdaq 100 (-3%) and Russell 2000 (-2%).   Last week’s weakness was broad-based, with every sector of the S&P 500 finishing lower. The poorest performers were technology (-2.7%) and energy (-2.3%). We are at a major decision point where investors must draw some longer-term conclusions as to where we are headed as a country. As is often the case, this political and economic decision point can also be seen in asset prices.  Stocks spiked on Monday, following news that the FBI said Hillary Clinton should not face criminal charges after a review of new emails. This action clearly indicates the market would be much more comfortable with a Clinton presidency. Fear Can Be a Good Thing Since mid-July, I have been warning that the extremely low market volatility — as evidenced by a reading in the Volatility S&P 500 (VIX) near 12 — would… Read More

All major U.S. indices finished in negative territory last week, giving back the previous week’s modest gains. They were led lower by the small-cap Russell 2000, which lost 2.5%. However, the four “majors” — the S&P 500, Dow Jones Industrial Average, Nasdaq 100 and Russell 2000 — are all still up 4% or more for the year. #-ad_banner-# The key level to watch is underlying support at 2,121 in the S&P 500, which has already been tested and held twice, on Sept. 12 and Oct. 13. A sustained decline below this level would represent a breakdown below the current three-month trading range. Read More

All major U.S. indices finished in negative territory last week, giving back the previous week’s modest gains. They were led lower by the small-cap Russell 2000, which lost 2.5%. However, the four “majors” — the S&P 500, Dow Jones Industrial Average, Nasdaq 100 and Russell 2000 — are all still up 4% or more for the year. #-ad_banner-# The key level to watch is underlying support at 2,121 in the S&P 500, which has already been tested and held twice, on Sept. 12 and Oct. 13. A sustained decline below this level would represent a breakdown below the current three-month trading range. It may also clear the way for a deeper sell-off in the weeks ahead. Last week’s strongest sectors were the defensive utilities (1%) and consumer staples (0.8%) groups, while real estate (-3.4%) and health care (-2.8%) were the weakest performers. Real estate was adversely affected by last week’s aggressive rise in long-term interest rates, which I will discuss in more detail later in the report. Market Fails To Rally From Oversold Conditions One way to determine the health of the market’s advance is by watching to see how it reacts to certain indicators and conditions. One of these conditions is… Read More

The major U.S. stock indices staged a very modest recovery last week. The fact that it was led by the tech-heavy Nasdaq 100, which rose 0.9%, is encouraging. However, historically low volatility, overly bullish investor sentiment and late-October seasonality warn that the market may not be out of the woods yet. Except for consumer staples (-0.3%) and industrials (-0.4%), all sectors of the S&P 500 finished in positive territory last week, led by materials (+1.6%) and financials (+1.2%). #-ad_banner-# Bigger picture, Asbury Research’s sector ETF-based metric shows that the biggest positive… Read More

The major U.S. stock indices staged a very modest recovery last week. The fact that it was led by the tech-heavy Nasdaq 100, which rose 0.9%, is encouraging. However, historically low volatility, overly bullish investor sentiment and late-October seasonality warn that the market may not be out of the woods yet. Except for consumer staples (-0.3%) and industrials (-0.4%), all sectors of the S&P 500 finished in positive territory last week, led by materials (+1.6%) and financials (+1.2%). #-ad_banner-# Bigger picture, Asbury Research’s sector ETF-based metric shows that the biggest positive percentage change in investor asset flows in the past one-month and three-month periods went into the energy sector, which is seen by many as a global economic barometer.  Investors Still Too Complacent Although I would love to show Market Outlook readers a different set of market metrics each week, my primary objective is to cover what I believe to be the most influential indicators to stock market direction at any given time. Given that criterion, market volatility remains at the top of the list.  The Volatility S&P 500 (VIX) index has been rising from a complacent extreme of 12 and… Read More