Month: May 2022

May 29th 2022  |

Key Takeaways

• We upgrade our strategic outlook from cautious to bullish
• New uptrend is establishing but expect high volatility
• Short-term-oriented indicators critical to watch within the next couple of days
• Time to get back into the market buy building up exposure (especially on weak trading days)

Market Review |

U.S. stocks posted strong gains for the week with the major averages notching their best weekly performance for months. Closing at 33,212.96, the Dow Jones Industrial Average finished up 6.2% for the week and snapped its longest losing streak, eight weeks, since 1923. The S&P 500 finished at 4,158.24 and rocketed 6.5% this week. The Nasdaq jumped 6.8% for the week and closed at 12,131.13. Both indexes ended seven-week losing streaks. Still, the averages are well off their highs, with the Nasdaq still solidly in bear market territory and the S&P 500 having briefly dipped more than 20% below its record last week. All key S&P sectors succeeded to close in positive territory for the week, led by the discretionary sector. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 25.7. Read More

May 22nd 2022  |

Key Takeaways

• The negative market regime still looks quite sustainable in its nature.
• On a very short-time frame, the chances for a stronger oversold bounce are increasing.
• Stay in cash, as the risk-reward ratio is too low in the current market regime

Market Review |

In line with the our latest Market Regime Outlook, U.S. stocks experienced a roller-coaster week that left the major averages significantly lower for the week. The Dow Jones Industrial Average plummeted 2.9% for the week to finish at 31,261.90. The blue-chip index booked its first eight-week losing streak since 1923. The S&P 500 lost 3.0% in five trading days to end at 3,901.36. The Nasdaq finished at 11,354.62 and plunged 3.8% this week. Both averages posted seven-week losing streaks. Most key S&P sectors ended in negative territory for the week, led by staples. The energy sector led gainers. The CBOE Volatility Index (VIX) – seen by many investors as the best "fear gauge" on Wall Street – traded near 29.4. Read More

May 15th 2022 |

Key Takeaways

• The negative market regime still looks quite sustainable in its nature.
• Fridays’ oversold bounce might continue into option expiration.
• Stay in cash, as the risk-reward ratio is too low in the current market regime.

Market Review |

Despite the 2.4% bounce on Friday, major averages posted major losses for another week. The Dow Jones Industrial Average dropped 2.1% over the week to 32,196.66. The blue-chip average posted its first 7-week losing streak since 2001. The S&P 500 closed at 4,023.89 and posted a 2.4% weekly loss, marking its longest weekly losing streak since 2011. Moreover, with a decline of more than 20 percent from its peak, the broad index has officially entered a bear market. The Nasdaq plunged 2.8% this week to end at 11,805. Nearly all key S&P sectors were negative for the week, staples were the only gainers. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 28.9. Read More

May 8th 2022 |

Key Takeaways

• The negative market regime still looks quite sustainable in its nature.
• Ingredients for a stronger oversold bounce are accumulating on a fast pace.
• Stay in cash, as the risk-reward ratio is too low in the current market regime.

Market Review |

U.S. stocks experienced a roller-coaster week. The losses on Friday clinched a losing week for all three major indexes despite starting off the period with three straight positive sessions. For the week, the Dow Jones Industrial Average slipped 0.2% for its sixth consecutive negative week to finish at 32,899.37. The blue-chip index recorded both its best and worst days since 2020. The S&P 500 dipped 0.2% in five trading days to end at 4,123.34. The Nasdaq lost 1.5% this week and finished at 12,144.66, about 25% below its record high from last November. Both averages booked their fifth straight losing week. Among the key S&P sectors, the energy sector was the best weekly performer, while real estate dragged the most. The CBOE Volatility Index (VIX) – seen by many investors as the best “fear gauge” on Wall Street – jumped to 30. Read More

May 1st 2022 |

Key Takeaways

• The negative market regime still looks quite sustainable in its nature.
• Chances for a stronger oversold but corrective bounce are again accumulating
• Stay in cash, as the risk-reward ratio is too low in the current market regime.

Market Review |

The S&P 500 headed down our expected path. After a short-lived bounce at the beginning of the week, U.S. stocks finished the week significantly lower. After tumbling more than 900 points on Friday, the Dow Jones Industrial Average finished the week down 2.5% at 32,977.21. The Dow is down 4.9% on the month. The S&P 500 closed the week at 4,131.93 and lost 3.3% week to date. For the month, the broad index lost 8.8%, its worst month since March 2020 at the onset of the Covid pandemic. The Nasdaq fell 3.9% from last Friday's close to end at 12,334.64. The tech index fell about 13.3% in April, its worst monthly performance since October 2008. The Nasdaq finished at a new low for 2022 and the S&P 500 did as well, with the main stock benchmark taking out its previous low in March. The S&P 500 is now down 13.3% in 2022. The Nasdaq is off by about 21.2%, and the Dow is nearly 9.3% lower on the year. All key S&P sectors ended in deep negative territory for the week, led by the discretionary sector. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, jumped to 33.4. Read More