The Sabrient Blog

The abundance of news last week — most with a positive slant — finally boosted the S&P 500 out of the Channel of Gloom in which it was mired for so long. Not only did the S&P 500 break out of the channel, but it is now threatening the 200-day moving average, having surpassed the 50-day MA last week.

Apple (AAPL), Morgan Stanley (MS), and Ford (F) powered the corporate side with excellent earnings reports, while today’s positive news from FedEx (FDX) and the housing industry — new home sales were up 23.6% in June — lifted the gloom from the economic side. To be sure, there were a few corporate disappointments last week — IBM’s (IBM) revenues, Amazon’s (AMZN) earnings, Google (GOOG) — but on the economic side, most of the reports were at least tolerable.

All this positive news rapidly shifted the market from its flight to safety to chasing the bulls. The baby bulls led the charge, with all small-caps turning in a +6.5% or better performance. Among the small caps, small-cap growth was the best (+6.7%). The worst cap/style was large-cap value, up +3.3%, which is still pretty good. Read more…

Tweet This Post

Despite a weak bounce off of a scary Tuesday morning gap down, and generally positive action for the week, the market remains in a precarious position. Many market technicians are predicting weakness ahead – either during June or later this summer. And in fact, the subtle bullish sentiment reflected by the Sabrient’s SectorCast-ETF rankings over the past few months has moderated a bit this week.

Market volatility is the norm now, with the VIX back above 35. The Dow and S&P 500 both found resistance when they tried to recapture their 200-day moving averages, but interestingly, the Nasdaq 100 (QQQQ) and the Russell 2000 (IWM) are holding strong above theirs, which is bullish. Nevertheless, there seems to be more room to the downside than upside at the moment.

Sabrient’s quantitative SectorCast-ETF rankings are getting squeezed by the global uncertainty. With no technical factors in the model, the weekly rankings tend to be pretty stable, but consensus sentiment among Wall Street analysts plays an important role in the model, and analysts are showing some caution and concern lately.

Although the model continues to reflect relative optimism with the more economically sensitive sectors remaining relatively strong in the rankings, the tightening scores is a yellow caution flag. Read more…

Tweet This Post

Since the market ditched its typical Monday mania today, maybe we can escape the inevitable depression that has followed in its wake.

For five consecutive weeks, the market has started with an up-day only to tank for the rest of the week. Some have blamed the Monday upsurge on weekend manipulation of the futures market.  If that’s the case, it didn’t work today. Overall, the S&P 500 has fallen from a high of 1150 on 1/19 to a low last week of 1044, losing approximately -9% from its high five weeks ago.

In contrast, I would expect this week to be a rather quiet one, as upcoming economic releases are somewhat muted.  Only the trade balance on Tuesday, retail sales and weekly jobless claims on Thursday, and consumer sentiment on Friday are thought of as potential market movers. Read more…

Tweet This Post