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

The past couple of weeks have sent investors into a frenzy.  I know most aren’t surprised by this market hiccup, but volatility like what we’ve seen recently can still be tough to stomach. It’s times like these that it becomes important to get back to the basics. In fact, I’d venture to say that anyone can follow just four simple steps to invest successfully. They’re not difficult concepts, and they’re most important when the market is in flux. 1. Have a system.  There are too many securities in the world to approach… Read More

The past couple of weeks have sent investors into a frenzy.  I know most aren’t surprised by this market hiccup, but volatility like what we’ve seen recently can still be tough to stomach. It’s times like these that it becomes important to get back to the basics. In fact, I’d venture to say that anyone can follow just four simple steps to invest successfully. They’re not difficult concepts, and they’re most important when the market is in flux. 1. Have a system.  There are too many securities in the world to approach the market without some framework for making rational choices. For instance, my newsletter, Game-Changing Stocks, has a simple system — put 80% of the portfolio into predictable stocks or index-tracking vehicles and allocate the remaining 20% to aggressive growth securities with greater potential returns than the overall market offers. This system is backstopped by millions of data points that offer a reliable statistical underpinning for predictable results over the long term.  Over the long term, corrections are going to happen. That’s reality. But we go in knowing that, and we do not panic when the arrows on Wall Street start… 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

It’s no secret that millennials, most of whom are now in their 20s and 30s, aren’t big on the stock market. Three-quarters of them don’t invest in stocks at all, recent surveys show. These folks witnessed their parents go through the dotcom implosion in 2000 and another market crash in 2008. No wonder they want to steer clear of stocks. #-ad_banner-#But just like every other generation, millenials need to save for retirement and most will have to invest in something to build a sufficient nest egg. My recommendation, which completely flies in the face of conventional retirement planning wisdom: put… Read More

It’s no secret that millennials, most of whom are now in their 20s and 30s, aren’t big on the stock market. Three-quarters of them don’t invest in stocks at all, recent surveys show. These folks witnessed their parents go through the dotcom implosion in 2000 and another market crash in 2008. No wonder they want to steer clear of stocks. #-ad_banner-#But just like every other generation, millenials need to save for retirement and most will have to invest in something to build a sufficient nest egg. My recommendation, which completely flies in the face of conventional retirement planning wisdom: put your money in the Vanguard Wellesley Income Fund (NYSE: VWINX), a $41-billion conservative allocation mutual fund that goes easy on equities and still offers solid returns. Why Millennials Should Buck Tradition Most financial advisors would scoff at this advice, since VWINX would typically be considered suitable for investors at or near retirement age. The fund allocates only 35%-to-40% of assets to stocks (37% is currently in equities) and puts the rest in bonds. It also holds cash at various times. Advisors traditionally want young investors to have portfolios that contain from 60% to 80% in stocks, perhaps even more. Read More

#-ad_banner-#It’s amazing what a month and a double-digit percentage drop in the market can do to an investor’s psyche. Just a few short weeks ago, my colleagues were nearly all-in bullish and balking at my predictions of a correction. Some even took on-air jabs at my bearish thesis while the market hit all-time highs.  Last month, I took a meeting with a few local fund managers to discuss market conditions and strategy. Many gloated about their year-to-date returns of 10% to 20%. If they only knew about the results subscribers to my premium options service, Profit Amplifier, are enjoying in… Read More

#-ad_banner-#It’s amazing what a month and a double-digit percentage drop in the market can do to an investor’s psyche. Just a few short weeks ago, my colleagues were nearly all-in bullish and balking at my predictions of a correction. Some even took on-air jabs at my bearish thesis while the market hit all-time highs.  Last month, I took a meeting with a few local fund managers to discuss market conditions and strategy. Many gloated about their year-to-date returns of 10% to 20%. If they only knew about the results subscribers to my premium options service, Profit Amplifier, are enjoying in 2015. So far this year, our closed trades have averaged an 18.4% return in 39 days. I also warned my colleagues that a correction was imminent. I cautioned that their strategies did little to protect them from a sell-off of 10% or more. What they failed to acknowledge was that with each new market high, the chances of a volatile correction increased.  Needless to say, I’ve been flooded with calls and emails asking for my advice and help in the past week. Unfortunately, buying flood insurance after a hurricane won’t do them much good.  In the past month, we’ve witnessed… 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