In mid-December, I warned that although my intermediate-term outlook (one to two quarters) for the U.S. stock market was bullish, Market Outlook readers should consider adopting defensive strategies to protect assets in the short term. Following an ill-fated attempt at a Santa Claus rally, the weakness I was afraid of emerged with a vengeance last week. In fact, this year’s nasty stock market decline has already done so much technical damage that it calls my positive intermediate-term bias into question. ​#-ad_banner-#The S&P 500 collapsed by 122 points, or 6%, to its lowest level… Read More

In mid-December, I warned that although my intermediate-term outlook (one to two quarters) for the U.S. stock market was bullish, Market Outlook readers should consider adopting defensive strategies to protect assets in the short term. Following an ill-fated attempt at a Santa Claus rally, the weakness I was afraid of emerged with a vengeance last week. In fact, this year’s nasty stock market decline has already done so much technical damage that it calls my positive intermediate-term bias into question. ​#-ad_banner-#The S&P 500 collapsed by 122 points, or 6%, to its lowest level since early October, exceeding my initial downside target of 1,965. The market-leading Nasdaq 100 and Russell 2000, which represent the technology and small-cap spaces, fared even worse, declining 7% and 7.9%, respectively.   From a sector standpoint, last week’s broader market decline was led by financial services, which lost 8.7%. This was driven by a strong shift in investor assets back into the relative safety of U.S. Treasuries, which pushed long-term interest rates lower. Declining long-term interest rates eat into the profits of lending institutions.  The best-performing sector was utilities, which only lost 0.4%. The decline in long-term rates encouraged… Read More

The major U.S. stock market indices limped to the 2015 finish line with weekly losses, leaving all but the Nasdaq indices in negative territory for the year. The Nasdaq 100 added 8.4% in 2015 while the broader Composite index gained 5.7%.  The broader market S&P 500 was down 0.7% for the year and the Dow Jones Industrial Average fell 2.2%. It was the small-cap Russell 2000 that led the way lower, though, losing 5.7% in 2015.   From a sector standpoint, consumer discretionary was the year’s best performer, gaining 8.3%, followed by health care, which added 5.3%. At the other… Read More

The major U.S. stock market indices limped to the 2015 finish line with weekly losses, leaving all but the Nasdaq indices in negative territory for the year. The Nasdaq 100 added 8.4% in 2015 while the broader Composite index gained 5.7%.  The broader market S&P 500 was down 0.7% for the year and the Dow Jones Industrial Average fell 2.2%. It was the small-cap Russell 2000 that led the way lower, though, losing 5.7% in 2015.   From a sector standpoint, consumer discretionary was the year’s best performer, gaining 8.3%, followed by health care, which added 5.3%. At the other end of the spectrum, energy was by far the weakest sector, declining 23.8%, followed by materials and utilities, which lost 10.6% and 8.3%, respectively. Editor’s note: Despite the poor performance of most financial assets, one indicator pegged stocks that delivered gains of 55%, 60% and 88% in 2015. It also uncovered many of the best-performing stocks of 2014. And now it has found the Top 10 Trades for 2016. If you want the names and tickers, follow this link. #-ad_banner-# All things considered, 2015 was a tough year for investors… Read More

Directionless volatility in the U.S. stock market continued during the holiday-shortened trading week, as all major indices closed sharply higher on the heels of two straight weeks of losses.  Last week ‘s surge higher was led by the downtrodden energy and materials sectors — the two worst performers of 2015. A rebound in oil prices and industrial and precious metals apparently provided hope that some economically influential commodities may have at least temporarily found a bottom. #-ad_banner-# Bigger picture, however, 2015 has been a lackluster to disappointing year for most individual sectors of the S&P 500. And when all was… Read More

Directionless volatility in the U.S. stock market continued during the holiday-shortened trading week, as all major indices closed sharply higher on the heels of two straight weeks of losses.  Last week ‘s surge higher was led by the downtrodden energy and materials sectors — the two worst performers of 2015. A rebound in oil prices and industrial and precious metals apparently provided hope that some economically influential commodities may have at least temporarily found a bottom. #-ad_banner-# Bigger picture, however, 2015 has been a lackluster to disappointing year for most individual sectors of the S&P 500. And when all was said and done, the broader market index ended last week right where it began its most recent bout of sideways, choppy behavior in late October. This indicates temporary investor indecision, which typically becomes the springboard for the next directional move.  In this week’s report, I will cover three charts that should help us determine whether that move will be up or down. Investor Fear Remains Key In last week’s Market Outlook, I pointed out that the Volatility S&P 500 index — better known as the VIX or fear gauge — had been above its 50-day moving average since Dec 10. Read More

The U.S. stock market posted its second consecutive weekly loss, led lower by the blue-chip Dow Jones Industrial Average, which shed 0.8%. The roller coaster week saw the broader market S&P 500 spike 3% by Wednesday’s close only to give up all of those gains and more by the close on Friday. With less than two weeks left in 2015, all major indices are in negative territory for the year except the Nasdaq. As I said last week, it’s time for investors to be on the defensive. #-ad_banner-# The two best-performing sectors last week — of… Read More

The U.S. stock market posted its second consecutive weekly loss, led lower by the blue-chip Dow Jones Industrial Average, which shed 0.8%. The roller coaster week saw the broader market S&P 500 spike 3% by Wednesday’s close only to give up all of those gains and more by the close on Friday. With less than two weeks left in 2015, all major indices are in negative territory for the year except the Nasdaq. As I said last week, it’s time for investors to be on the defensive. #-ad_banner-# The two best-performing sectors last week — of only four that posted a weekly gain — were utilities and real estate. Both sectors benefitted from the decline in long-term interest rates as investors made a defensive move back into the relative safety of U.S. government bonds. When interest rates decline, higher-yielding utilities become more attractive to investors while helping to spur real estate purchases. Apple: A Canary In The Coal Mine? In last week’s Market Outlook, I said recent price activity in market bellwether Apple (Nasdaq: AAPL) indicated a near-term top was in place at the early November high and that we could see a retest of the… Read More

Editor’s note: On Friday, Dec. 18, trading prodigy Jared Levy is going on camera to reveal his most lucrative secret. It’s a little-known Wall Street “insider” trade that he’s used to make millions. But here’s the best part: At the end of the event, you’ll have the chance to stake your claim in the up to $1 million we’re giving out. Click here to register and immediately get a sneak peek of how the strategy works.  The choppiness that has characterized the U.S. stock market since November continued last week, but this time with… Read More

Editor’s note: On Friday, Dec. 18, trading prodigy Jared Levy is going on camera to reveal his most lucrative secret. It’s a little-known Wall Street “insider” trade that he’s used to make millions. But here’s the best part: At the end of the event, you’ll have the chance to stake your claim in the up to $1 million we’re giving out. Click here to register and immediately get a sneak peek of how the strategy works.  The choppiness that has characterized the U.S. stock market since November continued last week, but this time with what appears to be some near-term directional implications. All major indices closed well in the red for the week, led by the small-cap Russell 2000, which lost 5.1%, bringing its year-to-date loss to 6.7%. Just two weeks ago, I pointed out that the index was on the verge of a bullish breakout that could set it up for a retest of the June highs. #-ad_banner-# Since then, however, the Russell 2000 has failed miserably, and the weakness in small-cap stocks is now spreading to the other market-leading sector, technology. This suggests that if Santa… Read More

The U.S. stock market featured a lot of fireworks last week but very little in the way of directional movement. All major indices closed less than 1% higher, and the beleaguered small-cap Russell 2000 lost 1.6%.  #-ad_banner-#The good news is that all of this directionless volatility has potentially set the stage for a Santa Claus rally between now and year end. I’ll discuss this in more detail later in the report. Last week’s strongest sectors were technology, which gained 1.5%, and financial services, which rose 1%. Energy was by far the weakest sector, losing 4.5%, triggered by a… Read More

The U.S. stock market featured a lot of fireworks last week but very little in the way of directional movement. All major indices closed less than 1% higher, and the beleaguered small-cap Russell 2000 lost 1.6%.  #-ad_banner-#The good news is that all of this directionless volatility has potentially set the stage for a Santa Claus rally between now and year end. I’ll discuss this in more detail later in the report. Last week’s strongest sectors were technology, which gained 1.5%, and financial services, which rose 1%. Energy was by far the weakest sector, losing 4.5%, triggered by a drop in West Texas Intermediate (WTI) crude oil prices below $40 a barrel to their lowest level since late August.  Not surprisingly, Asbury Research’s metric shows the biggest inflows of sector bet-related assets over the past one-week and one-month periods went into financials, and the biggest outflows came from energy. S&P 500 Coiling For A Santa Claus Rally? The benchmark S&P 500 has traded in a choppy, sideways manner since early November, developing a triangle pattern that represents near-term investor indecision on the heels of the index’s strong rise from the late-September lows. A sustained rise above the upper… Read More

All major U.S. indices closed essentially unchanged last week except for the small-cap Russell 2000. While this index has been a weak spot in 2015, it gained 2.3% last week and is now challenging major overhead resistance.  I’ll take a more in-depth look at this index and its potential implications for the broader market later in this report. But the highlight heading into this week was investor indecision — the kind that leads into new intermediate-term price trends. #-ad_banner-# The benchmark S&P 500 began the week at precisely the same level it closed at on Oct. 28 —… Read More

All major U.S. indices closed essentially unchanged last week except for the small-cap Russell 2000. While this index has been a weak spot in 2015, it gained 2.3% last week and is now challenging major overhead resistance.  I’ll take a more in-depth look at this index and its potential implications for the broader market later in this report. But the highlight heading into this week was investor indecision — the kind that leads into new intermediate-term price trends. #-ad_banner-# The benchmark S&P 500 began the week at precisely the same level it closed at on Oct. 28 — 2,090. I continue to view this general area as a major decision point. The market must either break major overhead resistance levels that are currently being tested — and soon — or run the risk of another pullback that could retest the September/October lows. The best-performing sectors of the lackluster week were consumer staples, up 1.8%, and real estate, up 1.5%, the latter of which has benefited from the recent slump in long-term U.S. interest rates. Bringing up the rear was defensive utilities, which lost 1.5%. Small Caps At Major Crossroads Weakness in market-leading small caps has kept a… Read More

All major U.S. indices closed significantly higher last week. With one exception, the market has advanced every week since October.  The good news is that the rally was led by the tech-heavy Nasdaq 100, which gained 4.1%. The bad news is that the small-cap Russell 2000 once again… Read More

All major U.S. indices closed lower last week, breaking six straight weeks of gains from the late-September lows. The tech-heavy Nasdaq 100 and small-cap Russell 2000 led the way down, both posting 4.4% declines. As has been the case for most of this unusual year, investors have been optimistic enough buy virtually every minor pullback since January. At the same time, they’ve lacked the conviction to push the major indices to new highs. I’ll discuss this phenomenon in more detail in a moment and share a key to getting an early read on the market’s next move. Last… Read More

All major U.S. indices closed lower last week, breaking six straight weeks of gains from the late-September lows. The tech-heavy Nasdaq 100 and small-cap Russell 2000 led the way down, both posting 4.4% declines. As has been the case for most of this unusual year, investors have been optimistic enough buy virtually every minor pullback since January. At the same time, they’ve lacked the conviction to push the major indices to new highs. I’ll discuss this phenomenon in more detail in a moment and share a key to getting an early read on the market’s next move. Last week’s market collapse was led by the economically sensitive energy sector, which lost 5.5%. Recent weakness in crude oil and industrial metals like copper, which I’ll cover this week, has revived fears of global deflation. That fear is at least part of the reason the stock market took it on the chin last week. #-ad_banner-# A Tale Of Two Levels In last week’s Market Outlook, I pointed out that the market-leading Nasdaq Composite was testing its tech-bubble high at 5,133 for the fifth time this year. As I’ve been saying, if the index can stay above this level,… Read More

All major U.S. indices closed higher again last week, logging the sixth straight week of overall strength. The rally was led by the beleaguered small-cap Russell 2000, which gained 3.3%.  This is a good overall sign because small-cap and technology stocks typically lead the broader market higher and lower. However, the Russell 2000 still has more work to do. It is the only major index still in negative territory for 2015. The two strongest sectors last week were financial services, up 3.7%, and financials, up 2.7%. The weakest sector was utilities, which lost 3.4%. #-ad_banner-# These sector-related gains… Read More

All major U.S. indices closed higher again last week, logging the sixth straight week of overall strength. The rally was led by the beleaguered small-cap Russell 2000, which gained 3.3%.  This is a good overall sign because small-cap and technology stocks typically lead the broader market higher and lower. However, the Russell 2000 still has more work to do. It is the only major index still in negative territory for 2015. The two strongest sectors last week were financial services, up 3.7%, and financials, up 2.7%. The weakest sector was utilities, which lost 3.4%. #-ad_banner-# These sector-related gains and losses were a direct result of last week’s big jump in long-term U.S. interest rates. The yield on the benchmark 10-year Treasury note rose by 18 basis points to finish the week at 2.34%. Rising long-term interest rates benefit lending institutions while attracting yield-seeking investor assets away from riskier utilities.   I’ll talk in more detail about the direction of long-term interest rates and the effect they could have on financial asset prices later in this report. Tech Stocks Front And Center Again This Week Three weeks ago, I pointed out a bullish chart pattern in the S&P 500… Read More