By Scott Martindale
President, Sabrient Systems LLC

Stocks continue to hold up well, encouraged by improving global fundamentals and a solid Q1 corporate earnings season. However, at the moment most of the major US market indices are struggling at key psychological levels of technical resistance that have held before, including Dow at 21,000, S&P 500 at 2,400, and Russell 2000 at 1,400. Only the Tech-heavy NASDAQ seems utterly undeterred by the 6,100 level, after having no problem blasting through the 6,000 level with ease last month and setting record highs almost daily. Perhaps the supreme strength in Tech will be able to lead the broader market through this tough resistance level. Every time it appears stocks are on the verge of a major correction, they catch a bid at an important technical support level. In other words, cautious optimism remains the MO of investors – despite weighty geopolitical risks and, here at home, furious political fighting at a level of viciousness I didn’t think possible in the U.S.

There is simply no denying the building momentum in broad global economic expansion, and any success in implementing domestic fiscal stimulus will just add even more fuel to this burgeoning fire. That’s not to say that we won’t see a nasty selloff at some point this year, but I think such an occurrence would have a news-driven (or Black Swan) trigger, and likely would ultimately serve as a broad-based buying opportunity.

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. Overall, our sector rankings still look bullish, while the sector rotation model has returned to a bullish bias even though stocks now struggle at strong psychological resistance levels.  Read more.... Read more about Sector Detector: Bulls gather conviction, led by Tech, as uncertainties are lifted

Scott MartindaleGiven all the geopolitical drama and worrisome news headlines – ranging from tensions with Russia and North Korea to “Brexit 2.0” and “Frexit” to uncertainties of Trump’s fiscal stimulus to the looming debt ceiling – it’s no wonder stocks have stalled for the past several weeks. Especially troubling is the notable underperformance since March 1 in small caps and transports. Nevertheless, economic fundamentals both globally and domestically are still solid. Global growth appears to be on a positive trend that could persist for the next couple of years, and Q1 earnings season should reflect impressive year-over-year corporate earnings growth, although not without its disappointments – as we already have seen in bellwethers like Goldman Sachs (GS), Johnson & Johnson (JNJ), and International Business Machines (IBM).

I continue to like the prospects for US equities for the balance of the year. I expect breadth will be solid, correlations will stay low, and dispersion high such that risk assets continue to look attractive, including high-quality dividend payers and growth stocks, particularly small caps, which I think will ultimately outperform this year despite their recent weakness. All of this bodes well for stock-pickers.

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. Overall, our sector rankings still look bullish, although the sector rotation model has, at least temporarily, moved to a neutral stance as the short-term technical picture has become cloudy. But after the pro-EU election results in France on Sunday, stocks may be ready for an upside breakout, no matter what Trump accomplishes in this final week of his first 100 days on the job.  Read on.... Read more about Sector Detector: Rankings remain bullish as a promising Q1 earnings season begins

By Scott Martindale
President, Sabrient Systems LLC

On Tuesday, March 21, the S&P 500 had its first 1%+ down-day of the year, and its first truly significant downward move in five months, falling -1.3% for the day, while the Russell 2000 small caps fell by an ominous -2.7%. For the S&P, it was the culmination of a -2.2% move over a 4-day period before stabilizing for a few days. But for the Dow, Monday of this week was its eighth straight losing day for the first time – its longest losing streak since 2011. The consensus bogeyman of course is the elusive passage of a new healthcare reconciliation bill and the fear that this exposes chinks in President’s Trump’s armor that may foreshadow delays in all his other fiscal stimulus proposals that have been so widely anticipated, and largely priced in. But I suggest focusing on the fundamental economic trends that are still solidly in place and not jump to conclusions about the future of external stimuli, some of which should enjoy broader bipartisan support. Maybe this is why the VIX has held defiantly below the important 15.0 level.

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. Overall, our sector rankings still look bullish, and the sector rotation model continues to suggest a bullish stance. Read on.... Read more about Sector Detector: Investors remain cautious as Trump meets unexpected obstacles

Scott MartindaleBy Scott Martindale
President, Sabrient Systems LLC

Last week, in the wake of the President’s address to Congress, stocks rallied hard but ran into a brick wall at Dow 21,000, NASDAQ 5,900, and S&P 500 2,400. For the moment, optimism is high due to solid economic and corporate earnings reports along with the expectation that economic skids will soon be greased by business-friendly fiscal policies. But the proof is in the pudding, as the saying goes, and the constant distractions from a laser focus on the Trump agenda are becoming worrisome – not to mention the many uncertainties in Europe, North Korea’s missile launches, and China’s lowered growth projection as it tries to address its high debt build-up. Nevertheless, capital continues to flow into risk assets.

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. Overall, our sector rankings still look bullish, and the sector rotation model continues to suggest a bullish stance. Read on.... Read more about Sector Detector: Frothy market awaits consolidation and new catalysts

By Scott Martindale
President, Sabrient Systems LLC

The year has begun with a continuation of the bullish optimism in equities. The new mood rewarding economically-sensitive market segments began with the big post-election rally – which was partly due to simply removing the election uncertainty and partly due to the “Trump Bump” and an expectation of a more business-friendly environment. Investors are playing a bit of wait-and-see regarding President Trump’s initial executive orders. Last week ended with a strong employment report and an executive order seeking to take the shackles off the banking industry (including dismantling of the Dodd-Frank Act and delay/review of the DOL Fiduciary Rule), which sent the Financial sector surging and led the Dow to close back above 20,000 and the NASDAQ Composite to new record highs, while the S&P500 struggles to breakout above the 2,300 level.

No doubt, the new Administration is shaking things up, as promised…and the left is pushing back hard, as promised. Nevertheless, I believe economic fundamentals are positive with a favorable environment for equities globally – especially fundamentals-based portfolios like Sabrient’s. I also like the prospects for small caps, European, and Japan.

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. Overall, our sector rankings still look bullish, and the sector rotation model continues to suggest a bullish stance. Read on.... Read more about Sector Detector: Stocks eye new highs as Trump gets busy fulfilling campaign promises

Scott MartindaleBy Scott Martindale
President, Sabrient Systems LLC

Investors continue to be sanguine about the economy and are reluctant to lighten up on stocks, even as we enter the New Year on the heels of a big post-election run-up, perhaps for fear of missing out on continued upside. Rather than fearing the uncertainty of a new (and maverick) administration, they instead have an expectation of a more business-friendly environment, fiscal stimulus, and a desirably higher level of inflation under Trump and a Republican-controlled congress. Stimulus likely would include lower corporate and personal taxes, immediate expensing of capital investment (rather than depreciating over time), incentives to repatriate offshore-held cash, reduced regulatory burdens, and infrastructure spending programs. Longer term, we also might see more favorable international trade deals and a freer market for healthcare coverage. Even the Fed is finally admitting that monetary stimulus alone can’t do the trick.

As the New Year gets underway, the technical picture remains strong, as the Dow is gathering strength to challenge ominous psychological round-number resistance at 20,000 and market breadth is impressive, led by small caps and value stocks. I believe we have a favorable environment for US equities going forward – especially fundamentals-based portfolios, like Sabrient’s annual Baker’s Dozen.

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. Overall, our sector rankings still look bullish, and the sector rotation model continues to suggest a bullish stance. Read on.... Read more about Sector Detector: New Year commences with a bullish optimism, but will it last?

I haven’t written in a few weeks. That can be a lot of time for the latest news to impact the character and direction of the market, right? So, what has changed since my last article? Well, not much, really. It seems the market isn’t quite so news-driven these days; instead it has been focusing on fundamentals and the overall improvement in prospects for the economy and corporate earnings. And these things are driving it ever higher. Read more about Sector Detector: Stocks methodically march ever higher as breadth continues to improve

The market broke out to the upside, as I predicted it would -- although the breakout came a good bit sooner than I anticipated. My expectation was that stocks would remain within their long-standing trading range until a clear upside catalyst emerged, such as improving Q2 earnings reports and forward guidance. But investors aren’t waiting around. Clearly, they are positioning in advance of the emergence of such catalysts. For now, fear of missing liftoff is stronger than fear of getting caught in a selloff. Read more about Sector Detector: Stocks break out as investors place their bets on endless monetary stimulus

The market has provided a nerve-wracking amusement park ride for those with the stomach to hang in there. Of course, the Brexit vote caused a nasty selloff due to the uncertainty of what comes next and the long-term ramifications, but the ensuing recovery was just as swift. At the end of it all, stocks are right back where they have been, mired in the same long-standing trading range but apparently (in my opinion) more inclined to find some sort of upside catalyst. Read more about Sector Detector: Stocks remain inside their long-standing trading range, but an upside breakout grows more likely

After a nice little rally from mid-February until early June, investors started taking chips off the table, ostensibly in anticipation of Thursday’s Brexit vote. But Monday brought a fresh hint of optimism that Britain will vote to remain in the union, and the market responded with a healthy, broad-based rally. On balance, there appear to be good tailwinds for U.S. equities over the near term. Read more about Sector Detector: Fundamentals still look solid despite Brexit-induced volatility

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