Stocks are less than 5% away from their all-time highs now, and the “Great Chase” is on. Institutions and large funds got caught up in the doom-and-gloom headlines, and have only now begun to realize what’s happening. But our Sector Bullseye analysis kept us on the right side of the tape. Analysis can be pretty simple if you know what to look for. Even with the market’s internals moving in the right direction, there is still a fair share of skeptics in this bull market. Am I here to try to convince them otherwise? Absolutely not. They’re part of what makes a market.  Tech’s Participation Is Broad and Deep When one sector makes up 30% of the S&P 500, it’s naturally going to have a much bigger impact on the index direction than its peers. I’ll just say it as bluntly as possible – tech hasn’t looked this good since

We’re heading into a new week with stocks ripping to the upside following positive developments on the trade front between the U.S. and China. Over the past few weeks, I’ve pointed out how the market’s internals have dramatically improved, and how we’re seeing leadership from the right sectors coming out of a potential bottom. This is why I can’t help but laugh when people pretend like, “Nobody ever saw anything coming.” For those willing to keep an open mind and embrace the nature of market psychology, following relative performance at a sector-based level can be extremely rewarding.  Let’s take a look at this week’s updates…  Mess With the Bulls, Get the Horns One of my favorite things about sector analysis is its simplicity. It doesn’t get easier than to understand that this market lives and dies by technology. It historically behaves as a leading sector, meaning it often bottoms and

Over the past few weeks, I’ve presented both the bullish and bearish cases for the stock market. We continue to see steps made in the right direction, although full confirmation of a bottom from a technical standpoint has yet to be achieved. This year’s volatility has managed to scare a fair share of market participants, and for good reasons. People like to talk about uncertainty being a problem for markets, but if you’ve been around long enough, you’ll know there’s always something to worry about. I’ll be back at you Monday to recap what’s happening with the sectors inside the stock market, but today, I want to pivot over to another sector that’s growing in importance. It’s signaling that the market’s appetite for risk is only improving in this environment.  As spring takes hold here in the Northern Hemisphere, are bears getting sleepy at the wrong time of year? Will

Stocks continued to squeeze last week, and by Friday’s close, bears were starting to question their position. We’re seeing a little bit of selling to start the new week, and any additional downturns from here will provide plenty of clarity towards the state of this market’s trend. But that’s just the surface level. We’re more focused on what’s going on internally, and over the past week, we’ve seen more noteworthy improvements. We haven’t gotten the “all clear” signal yet, but it’s coming ever closer. When it comes, you’ll want to be prepared. The Growth Rebound Continues There was quite a reshuffling of the sector leaderboard this past week. This tells us that the direction of money flows in markets is shifting, and it’s key that we keep up with these flows if we seek to stay aligned with the strongest trends. Technology (XLK) narrowly missed being the strongest sector on

When stocks are in bear markets, there are certain characteristics that can easily be observed for anyone that’s curious enough. That is, certain sectors will do better than others. I’m starting my 14th year in the “digital trading pits” now, and I’ll admit that I wasn’t always privy to this type of information. But once it came across my desk, I incorporated it into my trading, and my results improved dramatically.  Let’s talk about some of these market themes… The Best Defense Can Be a Good Offense I’ve been talking a lot about the emerging strength from the tech sector. Remember, this makes up 30% of the S&P 500 – the U.S. market lives and dies by tech. This week, we had a slew of solid reactions to earnings results from big tech names – the most consequential one coming from Microsoft (MSFT). We’re on the verge of seeing the

Stocks surged last week, and the question on everyone’s mind is whether the rebound was legit, or if it was one of those infamous bear market rallies. If you’ve been trading long enough, you’ve undoubtedly heard the saying, “The trend is your friend.” But over the years, I’ve uncovered a rider of sorts, which states, “Until the trend ends.” So, how do we know when a trend is ending or beginning? One of my favorite ways is to look at the market’s internal money flows. Slowly at First, then All at Once Technology (XLK) was the top-performing sector in the market last week. But the devil is in the details this time. Tech has been the best-performing sector in two of the last three weeks. I’m not quite comfortable calling this a full-blown trend yet, but this is the most important sector for you to watch this week, because if

The U.S. Dollar’s tumble has been capturing the headlines as of late, and we even have magazine covers showcasing its drop. It’s been hit especially hard against the Euro, and if you consider the Dollar Index, the Euro has the greatest weighting (57.6%). I’m going to be spending several weeks in Europe this summer, and fortunately, I was able to convert my Dollars to Euros way back around the 1.09 mark in the exchange rate. But this did get me thinking about some of my earliest exposure to international finance at a very young age. It’s as if I was being set up to become a trader in the future, without even realizing it… (JUMP) Once Upon a Time, Before the Euro I grew up here in southeast Michigan, not far from the Canadian border. There was an Italian cultural club my family used to frequent over in Windsor called

Stocks have seen a nice bid off the lows of April 7, but all of this volatility year-to-date has come from an attempted upheaval of the global trade order. During the market rout, liquidity dried up. This is why we saw the sharp moves to the downside. Eventually, there was some backpedaling on the tariffs from Trump, but I don’t think Fed Chair Powell helped the situation either.  Why is the Fed so behind the curve again? Has it really turned into a personal feud between Trump and Powell? Here’s what I think… (JUMP) About that Free Market One of the most dangerous things to do in markets is entertain fantasies that simply don’t exist. At the top of that list is the notion that if a true free market existed, our economic problems would disappear. First and foremost, a true free market has never existed. There have always been

In last week’s Tale of the Tape, I pointed out how bulls captured a beachhead as technology emerged as the top-performing sector of the week. This was a small bright spot in an otherwise abysmal tape for the bulls, and an opportunity to start turning the market tide in the near-term. But last week didn’t have the follow through that bulls needed to see, so as we begin the final full trading week of April, here’s what I want to see in order to calm the bears down… You Can Run, But Can You Hide? The real estate sector (XLRE) was the surprise outperformer last week, as it did better than its peers. Energy (XLE) was a close second, but either way, those are still decidedly bearish money flows. As you can see, consumer staples (XLP) and utilities (XLU) are still running the table on the longer-term timeframes, and going