Scott MartindaleBy Scott Martindale
President, Sabrient Systems LLC

July lived up to its history as a typically solid month for stocks, and 2H2017 is off to a strong start. Technology and Healthcare sectors continue to be the year-to-date leaders, and lately Utilities has gotten into the act on an income play as interest rates stay low. Large cap, mid cap, and small cap indices all continue to set all-time closing highs, while the CBOE Volatility Index (VIX) hit an all-time low last week. The 22,000 level on the Dow was just surpassed on a closing basis on Wednesday, and the 2,500 level on the S&P 500 beckons. Nasdaq has now shown positive performance in 11 of the past 13 months, so a little retrenchment is no surprise – if for no other reason but to take a breather and let other market segments play catch-up.

Although there are of course worrisome issues everywhere you look, the good news is that the global economy is strengthening, the Fed and other central banks are taking pains not to screw things up on their paths to “normalization,” and as a successful Q2 earnings season winds down, a weaker dollar should lead to a better Q3 than is currently forecasted. So, I would say that on balance, things continue to look encouraging. But as valuations in the mega caps (e.g., FAAMG) continue to rise, it finally may be time for small caps to seize the baton and start to outperform.

In this periodic update, I give my view of the current market environment, offer a technical analysis of the S&P 500 chart, review Sabrient’s weekly fundamentals-based SectorCast rankings of the ten U.S. business sectors, and then offer up some actionable ETF trading ideas. In summary, our sector rankings still look bullish, while the sector rotation model maintains its bullish bias, and the climate overall still seems favorable for risk assets like equities. However, while I was optimistic about solid market performance going into July, I think August might be a different story if the new levels of psychological resistance fail to break and volatility rears its head in this typically-languid month. Read on.... Read more about Sector Detector: Tech and Healthcare lead a surging market to new heights

Volatility reigned in January on elevated volume as stock investors shifted their focus from global events to U.S. earnings reports, which have ranged from amazing (e.g., Apple) to crushing (e.g., Microsoft). Although the earnings reports have brought plenty of surprises, the volatility is no surprise, as I and many other market commentators predicted for the New Year. Read more about Sector Detector: Volatility continues as earnings reports create excitement and despair

Last Monday was a banner day for most indices with S&P 500 hitting at new 46-month high of 1422.  Alas, a week later, today, it closed at 1382, down nearly -3%.  The NASDAQ and DJIA exhibited similar behavior. Read more about What the Market Wants: Concerned Outlook

david / Tag: BOFI, EWP, F, FCX, IEV, VGK, WNR / 0 Comments

Fear Factor Up . . . So is the Market Despite Mid-East Turmoil

by David Brown, Chief Market Strategist, Sabrient Systems

The market shrugged off the serious instability in the Middle East today, after tanking on those fears on Friday. The Dow, the Nasdaq, and the S&P 500 were all up, with the S&P 500 up the most, +0.77%. Read more about What the Market Wants: Fear Factor Up . . . So is the Market Despite Mid-East Turmoil

david / Tag: AMZN, AVT, AVX VLO, AXP, CAT, DD, F, NFLX, ROC, VIX, VXX / 0 Comments

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. Read more about WHAT THE MARKET WANTS: The Thundering of Little Feet

david / Tag: AAPL, AET, AFL, AMZN, BA, CIT, F, FCFS, FDX, GOOG, IBM, LVS, MOT, MRK, MS, NTSC, RGR, S, sectors, SNE, TESS, V, XOM / 0 Comments