All major U.S. indices closed higher last week, led by the downtrodden small-cap Russell 2000, which was up 1.5% but is still down 2.8% year to date. In comparison, the tech-heavy Nasdaq 100 and broad market S&P 500 are up 8.2% and 4.5%, respectively, so far in 2014.  From a sector standpoint, last week’s rebound was led by consumer discretionary and materials. My own metric shows that the largest inflow of sector-related investor assets over the past one-week, one-month and three-month periods was, not surprisingly, into consumer discretionary. This not only explains last week’s strength… Read More

All major U.S. indices closed higher last week, led by the downtrodden small-cap Russell 2000, which was up 1.5% but is still down 2.8% year to date. In comparison, the tech-heavy Nasdaq 100 and broad market S&P 500 are up 8.2% and 4.5%, respectively, so far in 2014.  From a sector standpoint, last week’s rebound was led by consumer discretionary and materials. My own metric shows that the largest inflow of sector-related investor assets over the past one-week, one-month and three-month periods was, not surprisingly, into consumer discretionary. This not only explains last week’s strength in the sector, but also portends continued strength and relative outperformance versus the S&P 500 in the weeks and potentially months ahead. #-ad_banner-#​In last week’s Market Outlook, I said that a corrective decline appeared to be getting under way in the broader market due to a significant increase in investor fear, recent weakness in small-cap stocks, and an overextended technology sector, all of which remain intact heading into this week. Although Friday’s sharp rally may have given some new hope to the bulls,… Read More

Major U.S. indices closed mixed last week, with the broad-market S&P 500 and tech-heavy Nasdaq 100 closing higher and the blue-chip Dow industrials and small-cap Russell 2000 closing lower. The bigger takeaway to last week’s lack of direction is that the bellwether S&P 500 has been moving sideways for the past month and is essentially unchanged since July 1. #-ad_banner-#This recent loss of upward momentum suggests some distribution/profit-taking has been occurring and defines a near-term decision point in the index, bordered by 1,986 on the upside and 1,953 on the downside, from which its 2014 advance must resume if still… Read More

Major U.S. indices closed mixed last week, with the broad-market S&P 500 and tech-heavy Nasdaq 100 closing higher and the blue-chip Dow industrials and small-cap Russell 2000 closing lower. The bigger takeaway to last week’s lack of direction is that the bellwether S&P 500 has been moving sideways for the past month and is essentially unchanged since July 1. #-ad_banner-#This recent loss of upward momentum suggests some distribution/profit-taking has been occurring and defines a near-term decision point in the index, bordered by 1,986 on the upside and 1,953 on the downside, from which its 2014 advance must resume if still healthy and intact. Small Caps, Volatility Will Be Key Again This Week In the July 14 and July 21 Market Outlooks, I pointed out that the Russell 2000 and the Vanguard Small Cap Growth ETF (NYSE: VBK) were situated right on top of major support levels and amid favorable conditions to resume their 2014 advances — if they were still valid. Following initial rebounds, Friday’s sharp decline positioned both back on top of these levels — 1,143 on the Russell 2000 and $121.53 on VBK. A key determining factor of whether these support… Read More

All major U.S. indices closed lower last week, led by the Russell 2000, which collapsed 4%. This pushed the small-cap index back into negative territory for the year, although all other major indices are still positive for 2014. #-ad_banner-#Defensive utilities and consumer staples were the only sectors that posted gains last week. This, combined with the collapse in the Russell 2000 — which along with the tech-heavy Nasdaq typically leads the broader market both higher and lower — suggests that investor assets are making a subtle shift into safer places, perhaps in anticipation of an upcoming correction. Russell 2000 Fails… Read More

All major U.S. indices closed lower last week, led by the Russell 2000, which collapsed 4%. This pushed the small-cap index back into negative territory for the year, although all other major indices are still positive for 2014. #-ad_banner-#Defensive utilities and consumer staples were the only sectors that posted gains last week. This, combined with the collapse in the Russell 2000 — which along with the tech-heavy Nasdaq typically leads the broader market both higher and lower — suggests that investor assets are making a subtle shift into safer places, perhaps in anticipation of an upcoming correction. Russell 2000 Fails to Make New 2014 Highs In the June 30 Market Outlook, I pointed out that the Russell 2000 had broken overhead resistance at 1,137, clearing the way for a retest of the 1,213 March 4 high. The index tested 1,213 resistance as expected on July 1, but immediately failed there and has since collapsed back into underlying support at 1,150 to 1,139, which represents the index’s 50-day (minor trend proxy) and 200-day (major trend proxy) moving averages. This sets up a near-term decision point for the Russell, from which its November 2012 uptrend should aggressively… Read More

The major U.S. indices were mixed last week, closing on Friday just slightly on either side of unchanged. The tech-heavy Nasdaq 100 and small-cap Russell 2000 were the strongest performers. As long as the May trend of relative outperformance by these two market-leading indices continues, so should the current broad market advance. #-ad_banner-#The two strongest market sectors last week were consumer discretionary and utilities. My own asset-flow based metric shows that the biggest increase in sector bet-related assets over the past one-week and one-month periods was in utilities, which supports more upcoming strength… Read More

The major U.S. indices were mixed last week, closing on Friday just slightly on either side of unchanged. The tech-heavy Nasdaq 100 and small-cap Russell 2000 were the strongest performers. As long as the May trend of relative outperformance by these two market-leading indices continues, so should the current broad market advance. #-ad_banner-#The two strongest market sectors last week were consumer discretionary and utilities. My own asset-flow based metric shows that the biggest increase in sector bet-related assets over the past one-week and one-month periods was in utilities, which supports more upcoming strength in this sector. A strengthening utilities sector is often driven by declining long-term U.S. interest rates, which we saw last week as the yield on the 10-year Treasury note declined by 9 basis points to 2.53%. This encourages yield-seeking investors to accept more credit risk (via utility stocks) in exchange for potentially higher returns. Therefore, as long as long-term interest rates continue to decline, it should drive more investor assets into utilities and buoy Treasury prices, which move inversely to yields. Small Caps, Tech Should Continue Leading the Way In the May 19 Market Outlook, I pointed… Read More

All major U.S. indices finished with gains last week, led by the small-cap Russell 2000, which was up 2.2% and moved back into positive territory for the year. Year to date, the strongest major index has been the tech-heavy Nasdaq 100, up 5.9%. Since technology and small-cap stocks typically lead the broader market, both higher and lower, we will view upcoming performance in these two key indices as a barometer of the market’s ability to extend its 2014 advance. #-ad_banner-#From a sector standpoint, one that I will be watching closely over the next month is consumer staples. My proprietary asset… Read More

All major U.S. indices finished with gains last week, led by the small-cap Russell 2000, which was up 2.2% and moved back into positive territory for the year. Year to date, the strongest major index has been the tech-heavy Nasdaq 100, up 5.9%. Since technology and small-cap stocks typically lead the broader market, both higher and lower, we will view upcoming performance in these two key indices as a barometer of the market’s ability to extend its 2014 advance. #-ad_banner-#From a sector standpoint, one that I will be watching closely over the next month is consumer staples. My proprietary asset flow metric shows that it has had the largest investor inflows over the past one-week and one-month periods. For perspective, similarly aggressive investor inflows into the energy sector in early March preceded 9% relative sector outperformance versus the S&P 500 between then and now. VIX Suggests Stock Market Advance Isn’t Over Yet ​In last week’s Market Outlook, I pointed out that the CBOE Volatility Index (VIX) finished the previous week just below its 50-day moving average at 13.01. I noted, “The past three times that the VIX made a… Read More

All major U.S. indices finished last week in negative territory, giving back a significant portion of their May gains. Interestingly, the decline was led by the defensive Dow industrials, while the Nasdaq 100 and Russell 2000 fared better, down just 0.5% and 0.2%, respectively. Despite the decline, all major U.S. indices except for the Russell are still in positive territory for the year. #-ad_banner-#The only sector of the S&P 500 that finished last week in the black was energy, gaining 1.7%. My own asset flow-based metric shows that the largest sector bet-related inflows over the past one-week, one-month and three-month… Read More

All major U.S. indices finished last week in negative territory, giving back a significant portion of their May gains. Interestingly, the decline was led by the defensive Dow industrials, while the Nasdaq 100 and Russell 2000 fared better, down just 0.5% and 0.2%, respectively. Despite the decline, all major U.S. indices except for the Russell are still in positive territory for the year. #-ad_banner-#The only sector of the S&P 500 that finished last week in the black was energy, gaining 1.7%. My own asset flow-based metric shows that the largest sector bet-related inflows over the past one-week, one-month and three-month periods were in energy. Largely due to these inflows, energy has outperformed with an 11.2% year-to-date gain versus 4.8% for the S&P 500. Trend Still Bullish, but Beware of Seasonal Headwinds In the May 12 Market Outlook, I pointed out an emerging bullish pattern in the SPDR Dow Jones Industrial Average (NYSE: DIA). I said, “A sustained rise above $165.51 would confirm a breakout from four months of sideways indecision in DIA that would target a 7% advance to $177.” The breakout I was expecting actually took place on… Read More

All major U.S. indices finished last week in positive territory, led by the Russell 2000 and Nasdaq 100. As I said in last week’s report, this is always a near-term positive sign for the overall market as small-cap and technology stocks typically lead the S&P 500 both higher and lower. #-ad_banner-#​Outperformance by these areas of the market indicates that investors are in a “risk on” mode and are willing to buy riskier, more volatile stocks to capture a better return. Last week’s strong performance by the Russell 2000 puts it back into positive territory year to date for the first… Read More

All major U.S. indices finished last week in positive territory, led by the Russell 2000 and Nasdaq 100. As I said in last week’s report, this is always a near-term positive sign for the overall market as small-cap and technology stocks typically lead the S&P 500 both higher and lower. #-ad_banner-#​Outperformance by these areas of the market indicates that investors are in a “risk on” mode and are willing to buy riskier, more volatile stocks to capture a better return. Last week’s strong performance by the Russell 2000 puts it back into positive territory year to date for the first time since April 4. There, it joins the other major U.S. indexes, led by the Nasdaq 100, which is up 5.6% in 2014.  From a sector standpoint, last week’s broad market advance was led by industrials (+2.3%), financials (+2.3%) and consumer discretionary (+1.9%). Meanwhile, defensive sectors like health care and consumer staples were relatively weak.  Recent Breakouts Point to More Near-Term Strength In the May 27 Market Outlook, I said the rise above 3,617 in the Nasdaq 100 “clears the way for more near-term strength and a potential 2% rise to retest the 3,738… Read More

All major U.S. indices finished last week in positive territory, led by the Nasdaq 100. This is a positive near-term factor for the overall market because technology stocks typically lead the broader market both higher and lower. For 2014, all major indices are in positive territory except for the small-cap Russell 2000, which is down 2.5%. #-ad_banner-#Despite the strong showing from the Nasdaq 100, the three strongest sectors last week were all defensive ones: utilities (+2.4%), consumer staples (+1.7%) and health care (+1.3%). This suggests investor apprehension that, should it continue, may lead into an overdue corrective decline later this… Read More

All major U.S. indices finished last week in positive territory, led by the Nasdaq 100. This is a positive near-term factor for the overall market because technology stocks typically lead the broader market both higher and lower. For 2014, all major indices are in positive territory except for the small-cap Russell 2000, which is down 2.5%. #-ad_banner-#Despite the strong showing from the Nasdaq 100, the three strongest sectors last week were all defensive ones: utilities (+2.4%), consumer staples (+1.7%) and health care (+1.3%). This suggests investor apprehension that, should it continue, may lead into an overdue corrective decline later this summer. Russell 2000, Google Still Key to Market Direction In the May 19 Market Outlook, I pointed out that the Russell 2000 had just tested and held major support at 1,083, saying, “As long as the Russell remains above it this week, I would view this level as a potential springboard for a new leg higher in the overall market.”   The index has since risen as expected, by about 6% into last week’s highs. The benchmark S&P 500 has risen by 3% to new all-time highs during that time. The chart shows the Russell… Read More

All major U.S. indices were higher last week, led by the previously downtrodden Nasdaq 100 (+2.5%) and Russell 2000 (+2.1%). Both of these market-leading indices must continue to outperform the broad market S&P 500 if last week’s strength is going to become the next leg higher within the larger 2013 stock market advance. The major indices are now all in positive territory for 2014 except for the small-cap Russell 2000, which ended last week down 3.2% for the year. #-ad_banner-#From a sector standpoint, my own asset flow-based metric shows the largest inflow of investor assets over the past week went… Read More

All major U.S. indices were higher last week, led by the previously downtrodden Nasdaq 100 (+2.5%) and Russell 2000 (+2.1%). Both of these market-leading indices must continue to outperform the broad market S&P 500 if last week’s strength is going to become the next leg higher within the larger 2013 stock market advance. The major indices are now all in positive territory for 2014 except for the small-cap Russell 2000, which ended last week down 3.2% for the year. #-ad_banner-#From a sector standpoint, my own asset flow-based metric shows the largest inflow of investor assets over the past week went into consumer discretionary, which led all sectors with a 2.1% gain. The utilities sector had the biggest outflow of investor assets and, as would be expected, was the only sector to lose ground for the week. Is Technology Leading the Blue-Chip Stocks Higher? Beginning in the April 21 Market Outlook, and again in several subsequent issues, I have been discussing overhead resistance at 3,617 on the Nasdaq 100 and stating that a rise above this level was necessary to indicate that this market-leading technology index’s larger November 2012 advance was resuming.  After negotiating this… Read More

The major indices were mixed last week, with the Dow industrials and Russell 2000 showing losses, the S&P 500 unchanged, and the recently downtrodden Nasdaq 100 posting a modest gain of 0.9%. The tech-heavy Nasdaq 100 must continue to outperform the S&P 500 from here, ideally accompanied by outperformance by the small-cap Russell 2000, if the current 2013 advance is to remain intact and begin a new leg higher. #-ad_banner-#From a sector standpoint, my own asset flow-based metric shows that the largest inflow of investor assets over the past week, month and quarter has been into energy, despite the sector’s… Read More

The major indices were mixed last week, with the Dow industrials and Russell 2000 showing losses, the S&P 500 unchanged, and the recently downtrodden Nasdaq 100 posting a modest gain of 0.9%. The tech-heavy Nasdaq 100 must continue to outperform the S&P 500 from here, ideally accompanied by outperformance by the small-cap Russell 2000, if the current 2013 advance is to remain intact and begin a new leg higher. #-ad_banner-#From a sector standpoint, my own asset flow-based metric shows that the largest inflow of investor assets over the past week, month and quarter has been into energy, despite the sector’s modest weakness last week. As long as this positive asset flow continues, the recent trend of relative outperformance by energy, which has beaten the S&P 500 by 7% since February, is likely to continue into the third quarter. Friday’s Rebound in Small Caps May Be a Good Sign In the April 28 and May 5 Market Outlooks, I discussed minor overhead resistance at 3,617 in the Nasdaq 100, and said that this market leading-technology index needed a sustained rise above this level to help power the broader market to fresh highs. The 3,617 level continues to… Read More