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

It’s all about the chips right now, and I’ll be upfront with you here: The Nvidia news this week about certain chip export restrictions is a bad sign. When I commented earlier this week about bulls capturing a beachhead, it was centered around technology, and specifically chips, outperforming their peers at a sector level. But what happens if there’s no follow-through from tech and chips? Here’s some food for thought over the long weekend… Mr. Market Says… The situation for the tech sector isn’t getting any better. Going back to the start of the fourth quarter in 2024, it’s the second-worst performer behind basic materials. It doesn’t take a rocket scientist to understand that the indices are going to have a tough time sustaining a rally without the tech sector, which makes up around 30% of the S&P 500. So, what’s the worst-case scenario here? I don’t actually think it’s

Last week was one for the record books – on both sides of the market, no less. Between record volatility crushes and one of the biggest one-day rallies in history, both bulls and bears are left scratching their heads asking, “Was that it?” I’m going to be completely up-front here and say that we have not gotten the “all-clear” for stocks just yet. But in the near-term, the sector performance rankings are telling an interesting story. If it can continue, great, but if some of the older trends continue, there’s still more pain ahead.  Here’s what I mean… Getting On-Base Isn’t the Same as Scoring Over the past couple of months, I’ve commented on the need for technology to emerge as a leading sector in this market. Remember, tech makes up around 30% of the S&P 500, so without its participation to the upside, this market isn’t going anywhere anytime

While most people are focused on what’s happening with tariffs right now, I want to bring your attention to another related matter that’s just as important, if not more so.  We have to watch the largest and most important market out there – currencies. What do currencies, and specifically, the U.S. dollar have to do with tariffs? A lot more than most think. As we are now in the early stages of the 90-day tariff pause (save for China), I want to bring your attention to another time where trade and the dollar were at the center of global finance discussions.  Check this out…  Let’s Go Back in Time… to the Plaza Hotel! Unfortunately, the story I’m about to share when it comes to the Plaza Hotel doesn’t involve Home Alone 2, but if you ever saw that movie and recall, Donald Trump was featured for a brief moment when

Bear markets have a funny way of making us stop and think a little more deeply than usual.  Trading, after all, is like a staring contest with your own reflection—blink, and you lose. If you’ve been following me, you know I’ve been waving caution flags since late February when market risks started to spike.  Since then, I’ve approached the tape with a lot more care and restraint. Did that mean I avoided all the pain of this recent volatility?  Not entirely. But let me put it this way: it could’ve been a whole lot worse if I’d tried to fight the market.  And that’s the critical lesson here—this game isn’t about flexing your ego and trying to outsmart the market at every twist and turn. Sometimes, survival is the smartest move you can make. That brings me to a question worth asking: What’s this all for? Why do we do

By now, the market’s decline is dominating the news headlines. The world is paying attention and there is a sense of panic in the air. Does that mean we’ve bottomed out already? Absolutely not. But our discipline in staying on top of weekly sector performance allows us to easily measure the market’s appetite for risk going into a new week.  And based on what the market is saying here, it’s still high-time to stay defensive. Let’s take a look…  When the Market Talks, We Listen Just take a look at this ranking table here. There is absolutely no justification to be aggressively long this market right now.  This doesn’t mean that you go out and sell everything in your portfolio. In fact, I would encourage you to be on the lookout for the names holding up the best in this environment. The market is clearly discounting a slowdown in consumer