All major U.S. indices closed higher last week except the small-cap Russell 2000, which lost just 0.4%. This was the market’s fifth week of overall strength, and the modest advance nudged the S&P 500 back into positive territory for the year.  The tech-heavy Nasdaq 100 remains in the lead this year, up 9.7% through the end of October. Technology stocks, specifically the Nasdaq 100 and Composite indices, are critical to overall market performance this month. We will be taking a closer look at both of these in a moment. Read More

All major U.S. indices closed higher last week except the small-cap Russell 2000, which lost just 0.4%. This was the market’s fifth week of overall strength, and the modest advance nudged the S&P 500 back into positive territory for the year.  The tech-heavy Nasdaq 100 remains in the lead this year, up 9.7% through the end of October. Technology stocks, specifically the Nasdaq 100 and Composite indices, are critical to overall market performance this month. We will be taking a closer look at both of these in a moment. #-ad_banner-# From a sector standpoint, last week’s advance was led by health care and consumer discretionary, which gained 3% and 1.7%, respectively. Asbury Research’s own ETF-based metric shows the biggest sector-related investor inflows during the past week went into health care, fueling strength in the sector.  The two weakest sectors last week were utilities and consumer staples, which lost 1.9% and 1.7%, respectively. Technology At Critical Decision Point In last week’s Market Outlook, I pointed out the Nasdaq 100’s move above its 4,451 Sept. 17 high on Oct. 22 suggested “the index’s… Read More

#-ad_banner-#All major U.S. indices closed higher last week to log their fourth straight week of overall strength. The rally was led by the tech-heavy Nasdaq 100, which gained 4.2% and is now up an impressive 9.2% for the year, compared to the modest 0.8% year-to-date rise in the broader market S&P 500. Bringing up the rear last week was the small-cap Russell 2000, which, along with technology, typically leads U.S. market rallies, so I would ideally like to see some emerging strength in this index to help sustain a fourth-quarter advance. Most sectors of the S&P 500 also finished in… Read More

#-ad_banner-#All major U.S. indices closed higher last week to log their fourth straight week of overall strength. The rally was led by the tech-heavy Nasdaq 100, which gained 4.2% and is now up an impressive 9.2% for the year, compared to the modest 0.8% year-to-date rise in the broader market S&P 500. Bringing up the rear last week was the small-cap Russell 2000, which, along with technology, typically leads U.S. market rallies, so I would ideally like to see some emerging strength in this index to help sustain a fourth-quarter advance. Most sectors of the S&P 500 also finished in positive territory last week, led by — you guessed it — technology, which gained 4.4%. Moreover, the green highlights in the table below show that the biggest inflow of investor assets over the past week, according to Asbury Research’s own metric, was into technology. This should come as no surprise, as it is what actually drove the outperformance. The red highlights show that the biggest outflow of assets over the past one-week, one-month and three-month periods came from health care. This warns that the sector is vulnerable to more weakness after being a market leader for most of… Read More

All major U.S. indices except the small-cap Russell 2000 closed higher last week, logging the third straight week of gains. However, the market still has some work to do if it’s going to pull this year out of the fire. With the exception of the tech-heavy Nasdaq, all major indices are still in negative territory for 2015. All sectors of the S&P 500 finished in positive territory last week except for industrials and materials. Two of the strongest sectors were defensive ones, utilities and health care, which is not the ideal springboard for a sustainable market rally. Read More

All major U.S. indices except the small-cap Russell 2000 closed higher last week, logging the third straight week of gains. However, the market still has some work to do if it’s going to pull this year out of the fire. With the exception of the tech-heavy Nasdaq, all major indices are still in negative territory for 2015. All sectors of the S&P 500 finished in positive territory last week except for industrials and materials. Two of the strongest sectors were defensive ones, utilities and health care, which is not the ideal springboard for a sustainable market rally. Moreover, Asbury Research’s own metric — which typically leads sector performance — shows the biggest inflow of investor assets over the past one-month and three-month periods was into utilities. Additionally, over the past one-week and three-month periods, the biggest outflow came from financials. I view this as a subtle warning not to be overly optimistic about a fourth-quarter market recovery just yet. Continued outperformance by utilities and underperformance by financials would be characteristic of declining long-term U.S. interest rates amid a flattening yield curve, would indicate an apprehensive bond market. #-ad_banner-#As I stated in last… Read More

All major U.S. indices closed higher last week, logging the second week of strength following choppy trading since late August.  Last week’s rally was led by the small-cap Russell 2000, which is another positive sign. The index gained 4.6% through Friday’s close but is still down 3.3% for the year and lagging the other major averages. Broad market advances are typically led by the Russell 2000 and tech-heavy Nasdaq 100, the latter of which is the only major index still in positive territory for 2015. Recent strength in the energy sector is more good news, as it suggests a pickup… Read More

All major U.S. indices closed higher last week, logging the second week of strength following choppy trading since late August.  Last week’s rally was led by the small-cap Russell 2000, which is another positive sign. The index gained 4.6% through Friday’s close but is still down 3.3% for the year and lagging the other major averages. Broad market advances are typically led by the Russell 2000 and tech-heavy Nasdaq 100, the latter of which is the only major index still in positive territory for 2015. Recent strength in the energy sector is more good news, as it suggests a pickup in expectations for global economic growth. In last week’s Market Outlook, I pointed out that the biggest expansion in sector bet-related investor assets over the previous one-week and one-month periods was in energy, according to Asbury Research’s own ETF-based metric. These positive asset flows have already fueled an 8.4% rise in the energy sector in the past month, making it by far the strongest sector of the S&P 500. It has outperformed the broader market index by 4.7 percentage points during that time. As long as these positive asset flows continue, so should strength in energy-related stocks. Resilient European Market… Read More

Most major U.S. indices closed higher last week, reversing the previous week’s negative close as choppy price activity continues. However, the market is hardly out of the woods just yet. The market-leading Russell 2000 closed lower last week while most major indices are still negative for the year. Read More

All major U.S. indices finished in the red last week, led by the market-leading Nasdaq 100 and Russell 2000, which more than relinquished their modest gains of a week earlier. Last week’s decline resulted in all major indices falling back into negative territory for 2015. All sectors of the S&P 500 closed lower last week with the exception of financials, consumer staples and utilities. The latter two are defensive and thus expected to outperform during a down week. #-ad_banner-# Interestingly, Asbury Research’s asset flow-based metric showed the biggest outflow of sector bet-related assets during the past… Read More

All major U.S. indices finished in the red last week, led by the market-leading Nasdaq 100 and Russell 2000, which more than relinquished their modest gains of a week earlier. Last week’s decline resulted in all major indices falling back into negative territory for 2015. All sectors of the S&P 500 closed lower last week with the exception of financials, consumer staples and utilities. The latter two are defensive and thus expected to outperform during a down week. #-ad_banner-# Interestingly, Asbury Research’s asset flow-based metric showed the biggest outflow of sector bet-related assets during the past one-week and one-month periods came from former 2015 highflier health care. While it is still among the strongest sectors of the S&P 500 year to date, it now looks vulnerable to more weakness during the fourth quarter.  Market Must Break Resistance to Confirm a Bottom In last week’s Market Outlook, I pointed out an important overhead resistance level at 641 in the market-leading PHLX Semiconductor (SOX) index. I said a sustained rise above it would be necessary to help confirm a broader market bottom was in place. The SOX closed last week 7.5% below this level at 593.  The… Read More

The major U.S. indices finished last week mixed, but a closer look reveals some subtle positive signs. The two strongest were the small-cap Russell 2000, which gained 0.5%, and the tech-heavy Nasdaq 100, which was unchanged.   Since small-cap and technology indices typically lead the broader market higher and lower, last week’s performance could be the early stages of some upcoming market stability. This is especially true as we close in on October, a month that has historically led a strong seasonal rebound into year end. #-ad_banner-# From a sector standpoint, however, the market is not showing any… Read More

The major U.S. indices finished last week mixed, but a closer look reveals some subtle positive signs. The two strongest were the small-cap Russell 2000, which gained 0.5%, and the tech-heavy Nasdaq 100, which was unchanged.   Since small-cap and technology indices typically lead the broader market higher and lower, last week’s performance could be the early stages of some upcoming market stability. This is especially true as we close in on October, a month that has historically led a strong seasonal rebound into year end. #-ad_banner-# From a sector standpoint, however, the market is not showing any signs of life just yet. The only sectors to post gains last week were defensive: utilities, health care and consumer staples. If and when a market bottom emerges, it is likely to be fueled by strength in more offensive sectors like technology and consumer discretionary, perhaps with a little help from cyclical sectors like energy and materials.  Watch Semis For Clue To Near-Term Direction In previous Market Outlooks, I discussed signs of an emerging stock market bottom including a bearish extreme in investor sentiment and historically weak market breadth. But I also said that overhead resistance levels needed to be… Read More

All major U.S. indices finished in positive territory last week, led by the tech-heavy Nasdaq 100, which gained 3.3%. This continued the market’s recent pattern of alternating positive and negative weekly closes while digesting the late-August collapse. This sideways “digestion” is likely to become the springboard for another leg lower within the market’s current decline — its first real correction in years — or the accumulation phase for its next intermediate-term advance. #-ad_banner-# Technology and health care led last week as all sectors of the S&P 500 posted gains except for utilities, which lost 0.7%.  This… Read More

All major U.S. indices finished in positive territory last week, led by the tech-heavy Nasdaq 100, which gained 3.3%. This continued the market’s recent pattern of alternating positive and negative weekly closes while digesting the late-August collapse. This sideways “digestion” is likely to become the springboard for another leg lower within the market’s current decline — its first real correction in years — or the accumulation phase for its next intermediate-term advance. #-ad_banner-# Technology and health care led last week as all sectors of the S&P 500 posted gains except for utilities, which lost 0.7%.  This continued utilities’ sharp turnaround. Between July 23 and Aug. 24, the sector outperformed the S&P 500 by roughly 13 percentage points. It then quickly gave back roughly half of those gains, in part triggered by the recent recovery in the yield of the 10-year Treasury note from a test of 2%.  Yet Another Sign Of An Emerging Market Bottom In last week’s Market Outlook, I pointed out the current extreme in negative investor sentiment. This is a contrary indicator and similar extremes have historically coincided with or led important market bottoms.  The chart below displays another contrarian sign… Read More

All major U.S. indices finished roughly 2% to 3% lower last week as stocks gave back some of the gains from the prior week’s rebound following the deepest decline since October 2014. On the heels of a quick 11% collapse between Aug. 18 and Aug. 25, the S&P 500 now appears to be in the process of digesting those losses as it drifts into what may turn out to be the accumulation phase for a fourth-quarter advance. All sectors of the S&P 500 closed in negative territory last week, led by utilities and health care. Utilities, which had… Read More

All major U.S. indices finished roughly 2% to 3% lower last week as stocks gave back some of the gains from the prior week’s rebound following the deepest decline since October 2014. On the heels of a quick 11% collapse between Aug. 18 and Aug. 25, the S&P 500 now appears to be in the process of digesting those losses as it drifts into what may turn out to be the accumulation phase for a fourth-quarter advance. All sectors of the S&P 500 closed in negative territory last week, led by utilities and health care. Utilities, which had been among the strongest sectors over the past three months, have really taken it on the chin in the past two weeks. This was due in large part to the late-August rebound in long-term U.S. interest rates. Investors shifted assets out of utilities and back into U.S. government bonds to take advantage of the higher yield while eliminating credit risk. #-ad_banner-# Later in this report, I’ll discuss how the typically prescient bond market is likely to become a leading indicator of stock market direction between now and year end. Apprehensive Investors Signal Emerging Bottom In the previous… Read More

One week after a nasty 5.8% collapse in the S&P 500, driven primarily by continued weakness in China, the broader market index turned an early week continuation of that decline into a modest 0.9% gain by Friday. The stabilization in U.S. equities was led by the market-leading technology-heavy Nasdaq 100 and small-cap Russell 2000, which posted weekly gains of 3.1% and 0.5%, respectively. #-ad_banner-# While this is certainly a good near-term sign heading into this week, the jury is still out on the market’s prognosis for the rest of the year. The August decline has… Read More

One week after a nasty 5.8% collapse in the S&P 500, driven primarily by continued weakness in China, the broader market index turned an early week continuation of that decline into a modest 0.9% gain by Friday. The stabilization in U.S. equities was led by the market-leading technology-heavy Nasdaq 100 and small-cap Russell 2000, which posted weekly gains of 3.1% and 0.5%, respectively. #-ad_banner-# While this is certainly a good near-term sign heading into this week, the jury is still out on the market’s prognosis for the rest of the year. The August decline has pushed all major U.S. indices except for the Nasdaq into negative territory for 2015. In this week’s Market Outlook, I will define some key levels in a U.S. market bellwether that should help us determine whether the worst is over or there is more pain to come. Most sectors of the S&P 500 posted gains last week, led by the beleaguered energy sector, which rose by 3.5%. Moreover, the table below shows that, according to Asbury Research’s own metric, the biggest percentage increase of investor assets over the past one-week and one-month periods went into energy.  These inflows are basically… Read More