All major U.S. stock indices finished in positive territory last week, for only the second time since Aug. 29, led by the Russell 2000, which gained 4.9%. This is good news for the market as small-cap stocks have lagged in a big way all year. The Russell 2000 is up just 0.9% year to date compared with 15.8% for the tech-heavy Nasdaq 100 and 9.2% for the broad market S&P 500. #-ad_banner-#Another good sign is that, despite the Federal Open Market Committee (FOMC) announcing the end of its bond-buying program on Wednesday, the S&P 500 rose by an additional 1.7%… Read More

All major U.S. stock indices finished in positive territory last week, for only the second time since Aug. 29, led by the Russell 2000, which gained 4.9%. This is good news for the market as small-cap stocks have lagged in a big way all year. The Russell 2000 is up just 0.9% year to date compared with 15.8% for the tech-heavy Nasdaq 100 and 9.2% for the broad market S&P 500. #-ad_banner-#Another good sign is that, despite the Federal Open Market Committee (FOMC) announcing the end of its bond-buying program on Wednesday, the S&P 500 rose by an additional 1.7% into Friday’s close. This suggests that, despite a lot of investor apprehension beforehand, the market ultimately interpreted the Federal Reserve’s action as evidence that it believes the U.S. economy is finally strong enough to stand on its own two feet. From a sector standpoint, last week’s rally was led by technology, up 3.3%, and financials, up 3.2%. This is another good sign for the overall market between now and year end as these sectors typically outperform amid expectations for a strengthening U.S. economy. Technology Stocks at a Key Inflection Point In the Aug. 25 Market Outlook,… Read More

All major U.S. stock indices finished in positive territory last week, for the first time since Aug. 29, led by the tech-heavy Nasdaq 100, which gained 5.9%. #-ad_banner-#​At face value, the outperformance by market-leading technology issues is a positive sign for the fourth quarter. But my proprietary metric shows that the biggest outflow of sector-related assets over the past one-week and one-month periods actually came from tech. Unless these outflows stop, the sustainability of last week’s strength in technology is suspect. Overall, last week’s market activity was encouraging as, in addition to the outperformance… Read More

All major U.S. stock indices finished in positive territory last week, for the first time since Aug. 29, led by the tech-heavy Nasdaq 100, which gained 5.9%. #-ad_banner-#​At face value, the outperformance by market-leading technology issues is a positive sign for the fourth quarter. But my proprietary metric shows that the biggest outflow of sector-related assets over the past one-week and one-month periods actually came from tech. Unless these outflows stop, the sustainability of last week’s strength in technology is suspect. Overall, last week’s market activity was encouraging as, in addition to the outperformance by technology, European stocks rebounded nicely as market volatility declined here in the United States. However, a little more upside follow through on last week’s U.S. market rebound is necessary before I am convinced that the September correction is over and the larger 2014 advance has resumed. Europe Still Key to the U.S. Market In last week’s Market Outlook, I discussed the bearish head-and-shoulders pattern in Germany’s DAX index, which has been positively correlated to the S&P 500 over the past 20 years. I said it targeted a decline to… Read More

All major U.S. stock indices finished in the red again last week except for the Russell 2000, which gained 2.8%, reversing the pattern that we have seen for most of this year where small-cap stocks lag the market. This emerging strength in small caps may be a good sign for the market between now and year end. But, for now, the broad market S&P 500, blue-chip Dow industrials and tech bellwether Nasdaq 100 are all negative for 2014 with no clear sign of a bottom in sight. #-ad_banner-#All sectors of the S&P 500 posted losses last week except for industrials,… Read More

All major U.S. stock indices finished in the red again last week except for the Russell 2000, which gained 2.8%, reversing the pattern that we have seen for most of this year where small-cap stocks lag the market. This emerging strength in small caps may be a good sign for the market between now and year end. But, for now, the broad market S&P 500, blue-chip Dow industrials and tech bellwether Nasdaq 100 are all negative for 2014 with no clear sign of a bottom in sight. #-ad_banner-#All sectors of the S&P 500 posted losses last week except for industrials, materials and utilities. One potential bright spot is that my own ETF-based metric shows the biggest inflow of investor assets last week went into energy. Should this continue, it may be a leading indication of a fourth-quarter buying opportunity in this downtrodden sector. Stay tuned. Keep Your Eyes Focused on Europe In last week’s Market Outlook, I discussed a bearish head-and-shoulders formation in Germany’s DAX index that targeted an additional 11% decline to 7,800. I said the positive long-term correlation between the DAX and the S&P 500 implied that the broader U.S. market may also be… Read More

All major U.S. stock indices finished in the red again last week, led lower by the small-cap Russell 2000 and tech-heavy Nasdaq 100. The decline pushed the Dow Jones Industrial Average into negative territory for the year where it joins the Russell 2000, which has been residing there for some time. #-ad_banner-#​On Sept. 15, the title of the Market Outlook was “Correction May be Getting Under Way — Protect Your Profits.” The bellwether S&P 500 peaked four days later, on Sept. 19, and has since declined by 113 points, or 5.6%, through the end… Read More

All major U.S. stock indices finished in the red again last week, led lower by the small-cap Russell 2000 and tech-heavy Nasdaq 100. The decline pushed the Dow Jones Industrial Average into negative territory for the year where it joins the Russell 2000, which has been residing there for some time. #-ad_banner-#​On Sept. 15, the title of the Market Outlook was “Correction May be Getting Under Way — Protect Your Profits.” The bellwether S&P 500 peaked four days later, on Sept. 19, and has since declined by 113 points, or 5.6%, through the end of last week. The collapse below major support levels at 1,080 in the Russell and 8,215 in the Dow Jones Transportation Average, both highlighted in last week’s Market Outlook, in addition to continued weakness in European markets, warn that an even deeper U.S. market decline may be emerging. Investors May Buy the Dip in the Diamonds In the Sept. 22 Market Outlook, I pointed out that daily assets invested in the SPDR Dow Jones Industrial Average ETF (NYSE: DIA… Read More

Despite Friday’s strong rebound, fueled by much better-than-expected September employment data, all major U.S. stock indices finished in the red last week. Once again, the decline was led by the small-cap Russell 2000, which lost 1.3% for the week and is now down 5.1% year to date. The other major indices are still positive for 2014. #-ad_banner-#Last week’s decline was led by the energy sector, which fell 4.1%. Not surprisingly, my own ETF asset flow-based metric shows that the biggest sector-related outflows over the past one-week, one-month, and three-month periods came from energy. Meanwhile, the… Read More

Despite Friday’s strong rebound, fueled by much better-than-expected September employment data, all major U.S. stock indices finished in the red last week. Once again, the decline was led by the small-cap Russell 2000, which lost 1.3% for the week and is now down 5.1% year to date. The other major indices are still positive for 2014. #-ad_banner-#Last week’s decline was led by the energy sector, which fell 4.1%. Not surprisingly, my own ETF asset flow-based metric shows that the biggest sector-related outflows over the past one-week, one-month, and three-month periods came from energy. Meanwhile, the biggest inflows over the past one-week and one-month periods were into health care, which has outperformed the S&P 500 by 4 percentage points since August. Investors Remain Nervous The tech-heavy Nasdaq 100 broke down below key underlying support at 4,000, which I discussed in the Sept. 29 Market Outlook, amid a still elevated CBOE Volatility Index (VIX) that indicates an apprehensive market that is vulnerable to more near-term weakness. The VIX has been above its 50-day moving average since Sept. 22. Read More

All major U.S. stock indices finished in the red last week, led lower by the small-cap Russell 2000, which lost 2.4% and is the only major U.S. index in negative territory for the year. #-ad_banner-#The key takeaway heading into this week is that the U.S. stock market is at another near-term decision point: Assuming the market’s larger 2014 advance is still healthy and intact, we should see its September pullback end. Put another way, if U.S. stocks can’t get any traction from their current level, a deeper correction could potentially extend well into October. Watch Key… Read More

All major U.S. stock indices finished in the red last week, led lower by the small-cap Russell 2000, which lost 2.4% and is the only major U.S. index in negative territory for the year. #-ad_banner-#The key takeaway heading into this week is that the U.S. stock market is at another near-term decision point: Assuming the market’s larger 2014 advance is still healthy and intact, we should see its September pullback end. Put another way, if U.S. stocks can’t get any traction from their current level, a deeper correction could potentially extend well into October. Watch Key Support Levels This Week The first chart displays what is probably the most influential index and price level to watch this week. In the Aug. 25 Market Outlook, I pointed out major overhead resistance in the market-leading Nasdaq 100 (NDX) at the 4,147 September 2000 high, which the index has been testing and holding ever since. Last week’s decline from 4147 has positioned NDX right on top of underlying support at 4,007 to 3,998, which represents its July 24 high and 50-day moving average. Read More

All major U.S. stock indices posted gains last week except for the Russell 2000, which lost 1.2% and is also the only major index in negative territory for 2014. Despite the weakness in small caps, the broader market, as measured by the S&P 500, has managed to rack up a decent 8.9% gain this year, largely on the back of technology issues. #-ad_banner-#The Nasdaq 100 is up 14.2% year to date. However, as I have been stating in this space for some time, if and when technology stocks stop leading, the broader market may be in… Read More

All major U.S. stock indices posted gains last week except for the Russell 2000, which lost 1.2% and is also the only major index in negative territory for 2014. Despite the weakness in small caps, the broader market, as measured by the S&P 500, has managed to rack up a decent 8.9% gain this year, largely on the back of technology issues. #-ad_banner-#The Nasdaq 100 is up 14.2% year to date. However, as I have been stating in this space for some time, if and when technology stocks stop leading, the broader market may be in for some significant problems over the near term. Dow Makes New High, but Problems Persist In last week’s Market Outlook, I warned that the early September new closing high in the Dow Jones Transportation Average had not yet been corroborated by a new closing high in the Dow Jones Industrial Average, which, according to Dow Theory, was a red flag for the overall market. That situation was averted last week by a new high in the industrials, clearing the way for more near-term strength in both indices. Read More

All major U.S. stock indices lost ground last week, led by the broad market S&P 500, which was down 1.1%. #-ad_banner-#​Halfway through the month, the market leading Nasdaq 100 (NDX) continues to stall just below formidable overhead resistance at 4,147, which I first discussed in the Aug. 25 Market Outlook. With the small-cap Russell 2000 the only major index in negative territory for the year, technology stocks have been responsible for market leadership. Without a significant and sustained rise above 4,147, or a strong surge higher by the… Read More

All major U.S. stock indices lost ground last week, led by the broad market S&P 500, which was down 1.1%. #-ad_banner-#​Halfway through the month, the market leading Nasdaq 100 (NDX) continues to stall just below formidable overhead resistance at 4,147, which I first discussed in the Aug. 25 Market Outlook. With the small-cap Russell 2000 the only major index in negative territory for the year, technology stocks have been responsible for market leadership. Without a significant and sustained rise above 4,147, or a strong surge higher by the Russell 2000 to pick up the slack, a broad market pullback is likely coming soon. All 10 sectors of the S&P 500 finished in negative territory for the week, led by energy, which was down 3.6%. My own metric based on ETF asset flows shows that the greatest outflow of sector-related assets over the past one-week, one-month and three-month periods was from the energy sector, which explains why it has been the weakest sector for each of these periods. Although my longer-term metrics suggest there will be an opportunity to buy energy-related assets in… Read More

All major U.S. indices closed higher for the fourth consecutive week, this time led by the small-cap Russell 2000, which was up 1.2%. Year to date, however, the Russell has by far been the weakest, up just 0.9%. This puts the burden for continued broad market leadership squarely on the other traditional market leader — technology. The tech-heavy Nasdaq 100 has been up to the challenge so far, posting a 13.7% gain year to date, and is a major reason why the S&P 500 is up 8.4% in 2014. But with small caps… Read More

All major U.S. indices closed higher for the fourth consecutive week, this time led by the small-cap Russell 2000, which was up 1.2%. Year to date, however, the Russell has by far been the weakest, up just 0.9%. This puts the burden for continued broad market leadership squarely on the other traditional market leader — technology. The tech-heavy Nasdaq 100 has been up to the challenge so far, posting a 13.7% gain year to date, and is a major reason why the S&P 500 is up 8.4% in 2014. But with small caps already weak, if and when technology stocks stop leading, the overall market is likely to run into some serious problems. My own metric, which is based on ETF asset flows, shows that the largest inflow of sector-related investor assets last week was into defensive utilities and out of industrials. Accordingly, last week’s strongest sector was utilities, up 2%, with industrials the only sector to finish the week in negative territory. Be Aware Of September Seasonal Weakness As we move into September, a good place to… Read More

All major U.S. indices closed higher for the third consecutive week, led by the Dow Jones Industrial Average, which was up 2%. Year to date, by far the strongest major index has been the tech-heavy Nasdaq 100 (NDX), which is up 12.8%. This leadership by technology has been a key catalyst in the 2014 broad market advance, helping the S&P 500 post a 7.6% gain despite a weak small cap sector. This strength in tech must continue to keep the broader market headed higher. #-ad_banner-#​From a sector standpoint, last week’s advance was led by financials, industrials and consumer… Read More

All major U.S. indices closed higher for the third consecutive week, led by the Dow Jones Industrial Average, which was up 2%. Year to date, by far the strongest major index has been the tech-heavy Nasdaq 100 (NDX), which is up 12.8%. This leadership by technology has been a key catalyst in the 2014 broad market advance, helping the S&P 500 post a 7.6% gain despite a weak small cap sector. This strength in tech must continue to keep the broader market headed higher. #-ad_banner-#​From a sector standpoint, last week’s advance was led by financials, industrials and consumer discretionary, but all sectors of the S&P 500 ended in positive territory. Key Indices Held Major Support Levels in August Many key indices, including the S&P 500, Dow Jones Industrial Average and PHLX Semiconductor Index, have rebounded nicely from major support levels that were tested during the first week of August, and finished last week at or near their 2014 highs. The SPDR Dow Jones Industrial Average (NYSE: DIA), which I first mentioned as a potential buying opportunity in the May 12 Market Outlook, closed out last week 3.7% above its Aug. Read More