Although the U.S. stock market was generally stable last week, the tone remained cautious as the defensive Dow Jones Industrial Average was the only major index to post a gain, and that of just 0.4%. #-ad_banner-#As has been the case for much of the past two months, the tech-laden Nasdaq 100 and small-cap Russell 2000 were the weakest indices, losing 0.9% and 1.9%, respectively. These two market leading indices must begin to get some traction, and soon, if the broader market is to avert — or at least postpone — a summer correction. Nasdaq Composite Likely to… Read More

Although the U.S. stock market was generally stable last week, the tone remained cautious as the defensive Dow Jones Industrial Average was the only major index to post a gain, and that of just 0.4%. #-ad_banner-#As has been the case for much of the past two months, the tech-laden Nasdaq 100 and small-cap Russell 2000 were the weakest indices, losing 0.9% and 1.9%, respectively. These two market leading indices must begin to get some traction, and soon, if the broader market is to avert — or at least postpone — a summer correction. Nasdaq Composite Likely to Lead the Next Trend The sideways movement in the U.S. stock market this year doesn’t make for splashy headlines, but it does indicate investor indecision, which is where new price trends begin. The key to investing in this type of environment is being able to identify when the market makes that shift from indecision back to conviction, and right now one of the best indices to watch is the Nasdaq Composite. The Nasdaq Composite is situated right between major support at 3,990 to 3,980, which represents the 200-day moving average (major trend proxy) and Dec. 18 and Feb. 5… Read More

All major U.S. indices essentially finished unchanged last week, except for the small-cap Russell 2000, which lost 1.3%. All major indices are still negative for the year except for the broad market S&P 500, which is up less than 1%.  #-ad_banner-#Utilities were the strongest sector last week, up 1.9%. Technology was the weakest, down 0.8%. In the March 31 Market Outlook, I said that my own metric showed investor assets most aggressively moved into energy and consumer staples, and out of health care. Energy and consumer staples have been the first and third strongest sectors since then, up 4.2% and… Read More

All major U.S. indices essentially finished unchanged last week, except for the small-cap Russell 2000, which lost 1.3%. All major indices are still negative for the year except for the broad market S&P 500, which is up less than 1%.  #-ad_banner-#Utilities were the strongest sector last week, up 1.9%. Technology was the weakest, down 0.8%. In the March 31 Market Outlook, I said that my own metric showed investor assets most aggressively moved into energy and consumer staples, and out of health care. Energy and consumer staples have been the first and third strongest sectors since then, up 4.2% and 1.9% respectively, while health care has been among the weakest, down 1.4%.  Last week, my metric showed that investor assets have most aggressively moved into industrials and out of consumer discretionary. It’s Sink or Swim Time for Market-Leading Nasdaq 100 In last week’s report, I pointed out an important band of overhead resistance in the Nasdaq 100, from 3,575 to 3,626, and said that this was where the mid-April rebound in the index should fail if it was just a minor rebound within an uncompleted March decline. The chart below shows that the index traded… Read More

All major U.S. indices finished more than 2% higher last week, essentially recouping their losses from a week earlier. Last week’s rebound from the underlying support levels that I discussed in the April 14 Market Outlook was led by the S&P 500, which rose 2.7%. Despite this rebound, however, all other major indices are still in negative territory for the year. #-ad_banner-#From a sector standpoint, energy led last week, up 4.9% and fueled by an aggressive influx of investor assets, according to my own metric. I first discussed unusually aggressive investor asset flows moving into energy in the March 31… Read More

All major U.S. indices finished more than 2% higher last week, essentially recouping their losses from a week earlier. Last week’s rebound from the underlying support levels that I discussed in the April 14 Market Outlook was led by the S&P 500, which rose 2.7%. Despite this rebound, however, all other major indices are still in negative territory for the year. #-ad_banner-#From a sector standpoint, energy led last week, up 4.9% and fueled by an aggressive influx of investor assets, according to my own metric. I first discussed unusually aggressive investor asset flows moving into energy in the March 31 Market Outlook, and the sector has since outperformed the S&P 500 by about 5%. Is the U.S. Stock Market Pullback Over? In last week’s report, I pointed out that the recent decline in the Dow Jones Industrial Average had positioned it right on top of major support at 16,014, and said, “I would expect at least some near-term dip buying to emerge as investors have been rewarded many times over the past year for buying sharp declines into support levels like this one.” The Dow actually traded as low as 16,028 on April 14, before spiking 432… Read More

All major U.S. indices finished more than 2% lower last week, led by the Russell 2000, an index of small-cap stocks, which was down 3.6%. Moreover, last week’s decline pushed the S&P 500 into negative territory for the year, joining the Russell 2000, Dow Jones Industrial Average and tech-heavy Nasdaq 100, which were already showing losses for 2014. From a sector standpoint, last week’s broad market collapse was led by financials and health care, which were both down 4%. The utilities sector was the only sector that finished in positive territory for the week, up just 0.6%. My own metric… Read More

All major U.S. indices finished more than 2% lower last week, led by the Russell 2000, an index of small-cap stocks, which was down 3.6%. Moreover, last week’s decline pushed the S&P 500 into negative territory for the year, joining the Russell 2000, Dow Jones Industrial Average and tech-heavy Nasdaq 100, which were already showing losses for 2014. From a sector standpoint, last week’s broad market collapse was led by financials and health care, which were both down 4%. The utilities sector was the only sector that finished in positive territory for the week, up just 0.6%. My own metric indicates that investors moved assets most aggressively into defensive consumer staples and utilities last week, and out of financials and industrials.   Dow, Nasdaq 100 Testing Minor Support Levels In last week’s Market Outlook, I pointed out a bearish key reversal day that emerged on April 4 in the Dow industrials. I said it indicated a near-term peak was in place at that day’s high and cleared the way for an additional 1.7% decline to 16,134. The Dow hit my target last week and continued to decline into Friday’s 16,027 close. The chart shows that last… Read More

The S&P 500, blue-chip Dow industrials and small-cap Russell 2000 were all fractionally higher for the week, but the tech-laden Nasdaq 100 — which tends to lead the market both higher and lower — was down almost 1% and led Friday’s sell-off following the March jobs report. All of these major indices are negative for 2014 except for the S&P 500, which is up just 1%.  My own metric shows that investor assets most aggressively moved into industrials and health care last week, and out of financials and utilities. In last week’s Market Outlook, I mentioned that investor assets most… Read More

The S&P 500, blue-chip Dow industrials and small-cap Russell 2000 were all fractionally higher for the week, but the tech-laden Nasdaq 100 — which tends to lead the market both higher and lower — was down almost 1% and led Friday’s sell-off following the March jobs report. All of these major indices are negative for 2014 except for the S&P 500, which is up just 1%.  My own metric shows that investor assets most aggressively moved into industrials and health care last week, and out of financials and utilities. In last week’s Market Outlook, I mentioned that investor assets most aggressively moved into the energy sector, which actually was the second consecutive week that energy attracted the most new assets. The Energy Select Sector SPDR (NYSE: XLE) has outperformed the SPDR S&P 500 (NYSE: SPY) by 4% since March 20, as our asset flow metric tends to slightly lead relative performance. As long as assets allocated to the energy sector continue to expand, this sector outperformance is likely to continue. Bearish Key Reversal Day Adds To Ongoing Dow Theory Warning Signal =Since the March 10 issue, I have been pointing out that the March 7 new 2014 closing high… Read More

The Dow Jones Industrial Average was the only major U.S. index to post a positive close for the week of March 24, but it was a meager 0.1% gain. Meanwhile, the tech-laden Nasdaq 100 and small-cap Russell 2000, both of which led the 2013 broad market advance, were down by 2.2% and 3.5%, respectively, for the week. Year to date, the broad market S&P 500 is the only major index in positive territory, up just 0.5%. #-ad_banner-#From a sector standpoint, my own ETF asset flow metric indicates that investor assets most aggressively moved into energy and consumer staples last week,… Read More

The Dow Jones Industrial Average was the only major U.S. index to post a positive close for the week of March 24, but it was a meager 0.1% gain. Meanwhile, the tech-laden Nasdaq 100 and small-cap Russell 2000, both of which led the 2013 broad market advance, were down by 2.2% and 3.5%, respectively, for the week. Year to date, the broad market S&P 500 is the only major index in positive territory, up just 0.5%. #-ad_banner-#From a sector standpoint, my own ETF asset flow metric indicates that investor assets most aggressively moved into energy and consumer staples last week, and most aggressively moved out of health care and industrials. Nasdaq 100 Closing In On Downside Target In last week’s Market Outlook, I pointed out an emerging bearish chart pattern in the market-leading Nasdaq 100 index. The head-and-shoulders indicated that a decline below underlying support at 3,617 would confirm the pattern and target an initial 3.4% decline to 3,530.  The chart shows the index declined below 3,617 support on Monday, March 24, subsequently collapsing by 110 points, or 3%, into Thursday’s 3,543 low before finishing the week at 3,571. Last week’s breakdown below… Read More

All major U.S. stock indexes closed higher for the week of March 17, led by the broad market S&P 500 (+1.4%) and Dow industrials (+1.5%). For the year, only the small-cap Russell 2000 (2.6%) and tech-laden Nasdaq 100 (1.7%) are positive. #-ad_banner-#Global stock markets were led lower by Russia and China. In the March 17 Market Outlook, I said I was expecting an additional decline of about 2% to 21,000 in China’s Hang Seng Index. Last week, the Hang Seng declined as expected, hitting a low of 21,137, and appears headed for a test of major support at 20,800. Heading… Read More

All major U.S. stock indexes closed higher for the week of March 17, led by the broad market S&P 500 (+1.4%) and Dow industrials (+1.5%). For the year, only the small-cap Russell 2000 (2.6%) and tech-laden Nasdaq 100 (1.7%) are positive. #-ad_banner-#Global stock markets were led lower by Russia and China. In the March 17 Market Outlook, I said I was expecting an additional decline of about 2% to 21,000 in China’s Hang Seng Index. Last week, the Hang Seng declined as expected, hitting a low of 21,137, and appears headed for a test of major support at 20,800. Heading into this week, the major European stock indexes are all situated just above major underlying support at their 200-day moving averages. This is where their larger cyclical uptrends should aggressively resume from, if still valid. Nasdaq 100: A Leading Indication of What To Expect This Week In my March 10 report, I said that momentum in the S&P 500 was still positive, but getting a bit frothy, indicating that the market was probably going to have increased difficulty continuing higher without a correction first. The U.S. broad market index is virtually unchanged since then. Last week, I pointed out… Read More

All major U.S. stock indices closed lower for the week of March 10, basically giving back all of the previous week’s gains. The market was led lower last week by the blue-chip Dow industrials, which lost 2.4%, leaving the Nasdaq and Russell 2000 as the only two major indices that are still in positive territory for 2014, up 1.7% and 1.5%, respectively, year to date.#-ad_banner-# U.S. stocks were particularly weak on Thursday, with the S&P 500 suffering its worst day since early February on rising tensions between Ukraine and Russia and concerns about a slowdown in China. Regarding the latter,… Read More

All major U.S. stock indices closed lower for the week of March 10, basically giving back all of the previous week’s gains. The market was led lower last week by the blue-chip Dow industrials, which lost 2.4%, leaving the Nasdaq and Russell 2000 as the only two major indices that are still in positive territory for 2014, up 1.7% and 1.5%, respectively, year to date.#-ad_banner-# U.S. stocks were particularly weak on Thursday, with the S&P 500 suffering its worst day since early February on rising tensions between Ukraine and Russia and concerns about a slowdown in China. Regarding the latter, I am expecting at least an additional 2.2% decline in China’s Hang Seng Index to 21,000. Dow Theory Non-Confirmation Persists In last week’s Market Outlook, I said, “The deeper that we go into 2014 without a confirming new high in the Dow, the more problematic it can eventually become from a Dow Theory standpoint.” As you can see in our first chart, the new 2014 closing high in the Dow transports set on March 7 of 7,592 versus the Jan. 23 high of 7,570 still has not been corroborated by a new high in the Dow industrials — and… Read More

All major U.S. stock indices closed higher for the week of March 7, with the small-cap-laden Russell 2000 leading the way with a 1.7% gain. In my Feb. 24 Market Outlook, I pointed out that three major U.S. indices — the Dow industrials, Dow transports and Russell 2000 — had yet to set new 2014 highs.#-ad_banner-# As of Friday, only one index is left without a new year-to-date high, the Dow industrials. Overall, this is positive for the broad market as the various U.S. indices are now for the most part confirming each other’s recent strength. However, the deeper that… Read More

All major U.S. stock indices closed higher for the week of March 7, with the small-cap-laden Russell 2000 leading the way with a 1.7% gain. In my Feb. 24 Market Outlook, I pointed out that three major U.S. indices — the Dow industrials, Dow transports and Russell 2000 — had yet to set new 2014 highs.#-ad_banner-# As of Friday, only one index is left without a new year-to-date high, the Dow industrials. Overall, this is positive for the broad market as the various U.S. indices are now for the most part confirming each other’s recent strength. However, the deeper that we go into 2014 without a confirming new high in the Dow, the more problematic it can eventually become from a Dow Theory standpoint. The Dow finished last week at 16,453, just 0.7% off its Dec. 31 all-time high. Market Momentum Still Bullish, but Becoming a Bit Frothy In my Feb. 18 report, I said that the bellwether S&P 500 was at a near-term inflection point according to market momentum, from which its larger 2013 advance should resume if still valid. The index set a near-term low at 1,825 two days later, on Feb. 20, and has since risen… Read More

The bellwether S&P 500 traded completely inside of last Monday’s trading range from Tuesday through Thursday of last week, indicating near-term investor indecision, before staging a tentative move to new all-time highs on Friday. Friday’s move to new highs, despite a sharp downward revision in Q4 2014 GDP and amid worries about Russian intervention in Ukraine, was an impressive show of bullish investor conviction and is characteristic of a market that wants to go higher. #-ad_banner-#Last week’s new 2014 high in the small-cap Russell 2000 index, matching those in the S&P 500 and in the tech-laden Nasdaq indexes, was another… Read More

The bellwether S&P 500 traded completely inside of last Monday’s trading range from Tuesday through Thursday of last week, indicating near-term investor indecision, before staging a tentative move to new all-time highs on Friday. Friday’s move to new highs, despite a sharp downward revision in Q4 2014 GDP and amid worries about Russian intervention in Ukraine, was an impressive show of bullish investor conviction and is characteristic of a market that wants to go higher. #-ad_banner-#Last week’s new 2014 high in the small-cap Russell 2000 index, matching those in the S&P 500 and in the tech-laden Nasdaq indexes, was another positive sign. However, as discussed here last week, both the Dow Jones Industrial Average and Transportation Index continue to lag and must also establish new 2014 highs to confirm and corroborate the recent strength seen in the rest of the market. Improving Market Breadth = More Horsepower for the Trend Despite the lagging Dow Jones indexes, there are also a lot of good things happening under the hood of this market — particularly on a near term basis. One of these is the positive shift in market momentum as indicated by the rising Moving Average… Read More