Stock Market Outlook: April 5th = Downtrend

The stock market outlook continues in a downtrend, but the bulls did picked themselves up a bit last week.

Oil, Industrials, Communications, and Momentum led assets higher, while Energy and Bitcoin underperformed.  Volatility crept into employment data, as we wait for the next round of inflation data and geopolitical headlines to hit the wires.

TREND ANALYSIS

The S&P500 ( $SPX ) rose 1.7% last week, finding some footing at the September lows.  The index is now:

• ~3% below the 50-day moving average
• ~1% below the 200-day moving average

Technical indicators showed some signs of bullishness last week:

• Average Directional Index: Bearish
  • Trend strength has stopped increasing
• Institutional Activity: Neutral
  • Look for a follow-through day to confirm the new rally
  • A follow-through is a significantly higher close than the prior day, on higher greater volume, and usually occur on Day 4 – 11 of the rally attempt
• On-Balance Volume: Bearish
  • Inflected higher, but remains below the long-term average

SPX Price & Volume Chart – 2026-04-05

PERFORMANCE HIGHLIGHTS & COMPARISONS

Asset Classes

Another week, another win for Oil ( $USO ).  Bitcoin was the lone asset class in the loss column.  U.S. bonds ( $IEF ) rose to neutral bias.

Asset Class Performance – 2026-04-05

S&P500 Sectors

Industrials and Communications ( XLI & XLC ) outperformed; Energy ( $XLE ) gave back  some of the recent gains.  Industrials ( $XLI ) also reclaimed neutral bias.

S&P Sector Performance – 2026-04-05

S&P500 Investing Styles

All the investing styles scored a win last week: Momentum ( $MTUM ) secured the top spot with a gain of more than 3% and Defensives ( $POWA ) came in last place with 0.6%.  Low Beta and Small Cap Value moved to neutral bias.

Sector Style Performance – 2026-04-05

COMMENTARY

Markets

Volatility retreated last week, for both equities and interest rates, thanks to oversold bounces across various asset classes.  A step in the right direction.

Macroeconomic Data & Policy

Employment data showed higher than expected gains, but came with an asterisk.  Job openings (JOLTS) were steady, and ADP private payrolls beat expectations, so no issues there.  Non-farm payrolls (NFP) was the problem: high volatility makes drawing conclusions on the health of the labor market very difficult.  March employment just about tripled expectations, in large part from seasonal recoveries and the end of a major strike in healthcare.  Payrolls in February were revised significantly lower (41k to -133k), while January figures were revised significantly higher (34k to 160k).

ISM Manufacturing PMI for increased in March, remaining in expansion territory and well above last year’s contractionary number.

Geopolitics

The 10-day grace period for U.S.- Iran negotiations ends this week, with severe ultimatums issued via social media.  Expect asset price volatility to continue until a ceasefire is reached.  And the longer the Strait of Hormuz remains closed, the longer the price impacts will reverberate through supply chains.

EYES ON THE HORIZON

We’ll get some form of macro data every day next week, plus a look at the March FOMC minutes.

• Monday: ISM Services PMI, 2026 NCAA men’s basketball National Championship Game
• Tuesday: Durable Goods
• Wednesday: FOMC Minutes
• Thursday: February PCE, Final Q4 GDP
• Friday: March CPI, Michigan Consumer Sentiment

Best to Your Week ( and GO BLUE)!

P.S. If you find this research helpful, please tell a friend.
If you don’t, tell an enemy.

Content Sources:
Bloomberg, CNBC, Federal Reserve Bank of St. Louis (FRED), Hedgeye, StockCharts.com,
TradingEconomics.com, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics.

Performance Methodology:
All sector performance data is sourced from ThinkorSwim and reflects price‑only returns
calculated using end‑of‑week closing data. Bias classifications follow a proprietary
Invest Safely, LLC model and update only when trend conditions meet predefined thresholds.

Disclaimer:
Invest Safely, LLC is an independent investment research and online financial media company.
Use of Invest Safely, LLC and any products available through Invest‑Safely.com is subject to
our Terms of Service and Privacy Policy.

Not a recommendation to buy or sell any security.

Stock Market Outlook: March 29th = Downtrend

The stock market outlook continues in a downtrend, though there are pockets of oversold conditions despite the elevated volatility.

Oil and Energy continue to outperform, and were joined by small cap value this week.  Bitcoin, Communications, and Large Cap Growth underperformed.  Mixed survey data and a downbeat consumer didn’t do anything to combat uncertainty caused by the conflict in West Asia.

TREND ANALYSIS

The S&P500 ( $SPX ) dropped 2.1% last week, falling further below key moving averages.  Th index is now:

• ~7% below the 50-day moving average
• ~4% below the 200-day moving average

All 3 technical indicators remain bearish and have shown no signs of changing sides yet:

• Average Directional Index: Bearish
  • A strong bearish trend is underway
• Institutional Activity: Bearish
  • Price continues to drop below key moving averages on elevated volume
• On-Balance Volume: Bearish
  • Remains below the long-term average

SPX Price & Volume Chart – 2026-03-29

PERFORMANCE HIGHLIGHTS & COMPARISONS

Asset Classes

Oil ( $USO ) continued its recent win streak in weekly performance, while Bitcoin lost the most ground.  Only Oil and the U.S. dollar are bullish.

Asset Class Performance – 2026-03-29

S&P500 Sectors

Thanks to the strength in Oil, Energy ( $XLE ) continues to resist the selloff, gaining over 5% last week despite the general market dropped more than 2%.  Communications was the worst sector ( $XLC ), thanks in large part to declines by Alphabet and Meta ( $GOOGL & $META ).  Utilities ( $XLU ) managed to regain bullish bias.

S&P Sector Performance – 2026-03-29

S&P500 Investing Styles

Small Cap and Mid Cap Value overperformed and Large Cap Growth underperformed.  All sector styles are bearish.

Sector Style Performance – 2026-03-29

COMMENTARY

Markets

The Volatility Index ( $VIX ) is back on the rise and looks destined to close above 30.  Bond volatility ( $MOVE ), remains above 110.  Both continue to signal markets under stress. While many areas in the equities and bonds are oversold verses most traditional technical indicators, markets also tend to crash from oversold levels when volatility is elevated like it is right now.

No need to try and pick a bottom.  Adding to positions when they’re below the 200 day moving average is usually a good bet for long-term investors, but the inflationary shock from oil prices has yet to be absorbed.  Wait for prices to re-establish themselves in bullish bias, or at least get back above key moving averages.  The focus on sectors, styles, and industry groups that are showing the most strength.

Macroeconomic Data & Policy

Manufacturing PMI climbed to 52.4 in March 2026, up substantially from last year.  Other the flip side, Services PMI fell to 51.1, down significantly from last year.  Since services has become a larger percentage of the overall economy, this divergence does not bode well for economic growth.

Consumer Sentiment fell year over year, for all age groups and political affiliations. Households with middle and higher incomes, as well as those with significant investments, experienced the steepest drops in confidence.

Geopolitics

Shipping disruptions continue in the Strait of Hormuz, which directly impacts the price of oil and indirectly impacts the price of almost everything else, from diesel fuel and shipping costs, to synthetic fibers for clothing, to detergents and fertilizers…let along plastic.

President Trump postponed further U.S. attacks on Iranian energy grids to provide a window for “negotiations”, but its not clear who is negotiating with whom at this point.  In the meantime, strikes and counterstrikes continue across the region.

EYES ON THE HORIZON

Next week the markets are closed for Good Friday, though NFP data will still be released.  We’ll get several updates on employment, as well we a speech from Fed Chair Powell and the latest ISM Manufacturing survey data.

• Monday: Powell Speech
• Tuesday: JOLTS
• Wednesday: ADP non-farm payrolls, Retail Sales, ISM Manufacturing
• Thursday: —
• Friday: Markets Closed, Non-Farm Payrolls

Best to Your Week!

P.S. If you find this research helpful, please tell a friend.
If you don’t, tell an enemy.

Content Sources:
Bloomberg, CNBC, Federal Reserve Bank of St. Louis (FRED), Hedgeye, StockCharts.com,
TradingEconomics.com, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics.

Performance Methodology:
All sector performance data is sourced from ThinkorSwim and reflects price‑only returns
calculated using end‑of‑week closing data. Bias classifications follow a proprietary
Invest Safely, LLC model and update only when trend conditions meet predefined thresholds.

Disclaimer:
Invest Safely, LLC is an independent investment research and online financial media company.
Use of Invest Safely, LLC and any products available through Invest‑Safely.com is subject to
our Terms of Service and Privacy Policy.

Not a recommendation to buy or sell any security.

Stock Market Outlook: March 22nd = Downtrend

The stock market outlook continues in a downtrend and price fell below long-term technical indicators.

Oil and Energy outperformed again, while Gold, Utilities, and Low Volatility underperformed.  The FOMC held rates steady, while investors were busy repricing risk across asset classes.

TREND ANALYSIS

The S&P500 ( $SPX ) dropped 1.9% last week, slicing through the 200-day moving average.  Price is now:

• ~5% below the 50-day moving average
• ~2% below the 200-day moving average

All 3 technical indicators remain bearish and have shown no signs of changing sides yet:

• Average Directional Index: Bearish
  • A strong bearish trend is underway
• Institutional Activity: Bearish
  • Price fell below the 200-day moving average on elevated volume
• On-Balance Volume: Bearish
  • Remains below the long-term average

SPX Price & Volume Chart – 2026-03-22

PERFORMANCE HIGHLIGHTS & COMPARISONS

Asset Classes

Oil ( $USO ) was the only asset to register a gain, while Gold ( $GLD ) led to the downside again after dropping 10%!  Gold, along with U.S. Bonds ( $IEF ), dropped to Bearish bias as well.

Asset Class Performance – 2026-03-22

S&P500 Sectors

Energy ( $XLE ) continues to resist the selloff, and Financials managed to finish in the green.  Utilities ( $XLU ) bore the brunt of the selling last week, though Industrials ( $XLI ) and Staples weren’t far behind.  Consumer Staples and Real Estate ( $XLP, $XLRE ) dropped to bearish bias; Utilities fell to neutral.

S&P Sector Performance – 2026-03-22

S&P500 Investing Styles

In a strange twist, High Beta ( $SPHB ) outperformed and Low Beta ( $SPLV ) underperformed during last weeks selling!  Low Beta also dropped to bearish bias, putting the entire style space into risk-off.

Sector Style Performance – 2026-03-22

COMMENTARY

Markets

Oil and the US dollar are the only assets in bullish trends.  Equities remain risk off, despite being deeply oversold per most technical analysis techniques.  Even traditional safety plays, like Low Volatility and Utilities, have led to the downside during the past two weeks.  The sectors to watch from last week, Consumer Staples and Real Estate ( $XLP, $XLRE ), did indeed test their bias turning points.  Both failed. Just another reminder that when an asset class sells off, there are few, if any, places to hide.

The Volatility Index ( $VIX ) was flat on the weekly basis, but it’s uptrend remains intact.  Bond volatility ( $MOVE ), or more accurately Treasury Yield Volatility, was and is the real story, as it continues the recent breakout.  The index jumped 28% on Friday to a reading of 108, in response to large moves in Treasury yields.

Why is the change in Treasury yields the real story? Because fixed income is the second largest market in the world behind currencies, and U.S. treasuries drive that market.  Sudden changes in treasury yields cause nearly every financial asset to be repriced, force portfolio managers to rebalance risk, and ultimately shift capital flows.

Case in point: Gold.  The ultimate safe haven asset dropped 10% last week and is now bearish bias, which seems counterintuitive.  Why?  When financial markets start to go sideways, traders sell what they can to cover what they must.  Gold had been winning bigly, especially if you were using leverage as many institutions do.  With the U.S. Dollar and Treasury’s sharply higher, investors are forced to sell winning positions offset losing positions in other areas in order to rebalance, de-risk, or meet margin calls.  To a lesser extent, this behavior also explains some of the move in recent winning sectors like Materials and Industrials,

Macroeconomic Data & Policy

Headline PPI was flat year over year year at +3.4%.  Core PPI rose 20 bps +3.9% y/y.  Combined with CPI and PCE, the FOMC chose to leave rates unchanged.  And it’s no longer clear when we’ll see the next rate cut.  The spike in treasury yields actually caused probability markets to start pricing in rate hikes!

Geopolitics

Even for the best traders and investors are having a tough time in today’s headline/event market. Financial markets hate uncertainty, and uncertainty is the only thing that certain at the moment. Our collective struggle is one of the side-effects from a “flood the zone” communication strategy:

“Flood the zone” is a political / media strategy designed to overwhelm, disorient, and distract by releasing large volume and/or rapid succession of news, accusations, or information.

When the strategy is applied to military actions involving a linchpin of the global energy market ( Oil and the Strait of Hormuz ), an element of uncertainty is injected into every supply chain on the planet.  Rising uncertainty equals rising risk, which you’re seeing reflected in prices and interest rates real-time.

EYES ON THE HORIZON

The good news is that on the other side of the current turmoil are new opportunities.  The time will come to redeploy capital into assets, sectors, and styles with new bullish trends.

Next week is a lighter data release schedule, with data from two surveys incoming: Flash PMI and Michigan Consumer Sentiment.  Flash PMI compiles responses from purchasing managers on business conditions like employment, production, orders, pricing, deliveries, inventories, etc.

• Monday: —
• Tuesday: Flash PMI
• Wednesday: —
• Thursday: —
• Friday: Michigan Consumer Sentiment

Best to Your Week!

P.S. If you find this research helpful, please tell a friend.
If you don’t, tell an enemy.

Content Sources:
Bloomberg, CNBC, Federal Reserve Bank of St. Louis (FRED), Hedgeye, StockCharts.com,
TradingEconomics.com, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics.

Performance Methodology:
All sector performance data is sourced from ThinkorSwim and reflects price‑only returns
calculated using end‑of‑week closing data. Bias classifications follow a proprietary
Invest Safely, LLC model and update only when trend conditions meet predefined thresholds.

Disclaimer:
Invest Safely, LLC is an independent investment research and online financial media company.
Use of Invest Safely, LLC and any products available through Invest‑Safely.com is subject to
our Terms of Service and Privacy Policy.

Not a recommendation to buy or sell any security.

Stock Market Outlook: March 15th = Downtrend

The stock market outlook enters week 6 of the current downtrend, as volatility continues to rise.

Oil, Energy and Momentum outperformed; Gold, Consumer Discretionary, Materials, and High Dividends underperformed.  Inflation data was mixed ahead of this week’s FOMC decision.

TREND ANALYSIS

The S&P500 ( $SPX ) dropped 1.6% last week:

• ~3.5% below the 50-day moving average
• ~0.5% above the 200-day moving average

All 3 technical indicators remain bearish and highlight weakness in the index:

• Average Directional Index: Bearish
  • The base ADX number is on the rise, signaling a strengthening trend
• Institutional Activity: Bearish
  • Price fell further below the 50-day moving average
• On-Balance Volume: Bearish
  • Remains below the long-term average

SPX Price & Volume Chart – 2026-03-15

PERFORMANCE HIGHLIGHTS & COMPARISONS

Asset Classes

Oil ( $USO ) led assets higher again last week, gaining another 10%; that’s +52% in the past 4 weeks, and +70% since the bias shifted.  Gold ( $GLD ) led to the downside.  Development Market Equities ( $VEA ) fell to Bearish bias.

Asset Class Performance – 2026-03-15

S&P500 Sectors

Energy ( $XLE ) was the best sector; Consumer Discretionary and Materials ( $XLY, $XLB ) were the worst.  Communications, Industrials, and Materials ( $XLC, $XLI, $XLB ) moved to bearish bias.

S&P Sector Performance – 2026-03-15

S&P500 Investing Styles

Momentum ( $MTUM ) squeezed out the sole gain in investing styles.  High Dividend and Defensives ( $SPHD, $POWA ) were bottom of the barrel. There were no bias changes last week.

Sector Style Performance – 2026-03-15

COMMENTARY

Markets

Investors continue to pile into the U.S. Dollar ( $DXY ), pushing the reserve currency up almost 2% last week and creating more headwinds for and assets that aren’t oil.  Bitcoin ( $IBIT ) consolidated near 65,000, but didn’t benefit from the “flight to safety” trade.

Treasury yields rallied off of lows last week, sending rates higher and bond funds lower.  Apparently, investors are concerned that energy prices will remain higher for longer, which will keep inflation higher for longer.  This week’s FOMC meeting will be interesting.

Equities had another rough week.  Recent sector strongholds have sold off over the past two weeks.  Industrials and Materials are now bearish bias. Consumer Staples and Real Estate ( $XLP, $XLRE ) look set to test their turning points shortly.

The Volatility Index ( $VIX ) ended the week at 27; down from the open at 35 ( ! ), but still in Hedgeye’s “chop-bucket” ( elevated uncertainty ) and continuing to trend higher.  Bond volatility ( $MOVE ) broke out last week too, getting into it’s version of the “chop-bucket” between 80 and 100.

Until volatility retreats, caution and patience is warranted.

Macroeconomic Data & Policy

Inflation data was mixed.  The Consumer Price Index ( CPI ) showed slowing inflation year over year; Headline CPI fell 40 basis points to 2.4% and Core dropped 60 basis points to 2.5%.  The Personal Consumption Expenditures ( PCE ) index showed rising prices; Headline PCE climbed 40 basis points to 2.8%, and Core rose 50 basis points to 3.1%.

The revised 2025 Q4 GDP figures showed a growth rate of 0.7%, cutting the first estimate in half and coming in well below the 1.9% increased seen in Q4 2024.  A decline in government spending had the biggest impact ( government shutdown ).

Job Openings and Labor Turnover Survey ( JOLTS ) rebounded from December’s 5-year low, but are still lower on a year over year basis.

Geopolitics

The Strait of Hormuz closure, bombing of Kharg Island, and U.S. Treasury waver for Russian oil dominated headlines and generated a lot of volatility in the fossil-fuel energy space.

EYES ON THE HORIZON

This week, the FOMC announces their latest decision on interest rates, and we get a Producer Price Index ( PPI ) update and the latest housing data.  Don’t overlook options expiration at the end of the week.

• Monday: —
• Tuesday: Pending Home Sales
• Wednesday: PPI & FOMC Rate decision
• Thursday: New Home Sales
• Friday: Weekly, Monthly, and Quarterly Options Expiration

Best to Your Week!

P.S. If you find this research helpful, please tell a friend.
If you don’t, tell an enemy.

Content Sources:
Bloomberg, CNBC, Federal Reserve Bank of St. Louis (FRED), Hedgeye, StockCharts.com,
TradingEconomics.com, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics.

Performance Methodology:
All sector performance data is sourced from ThinkorSwim and reflects price‑only returns
calculated using end‑of‑week closing data. Bias classifications follow a proprietary
Invest Safely, LLC model and update only when trend conditions meet predefined thresholds.

Disclaimer:
Invest Safely, LLC is an independent investment research and online financial media company.
Use of Invest Safely, LLC and any products available through Invest‑Safely.com is subject to
our Terms of Service and Privacy Policy.

Not a recommendation to buy or sell any security.

Stock Market Outlook: March 8th = Downtrend

The stock market outlook remains in a downtrend, as markets reprice the impact of international conflict.

Oil and Energy outperformed; Emerging Markets, Industrials, and Value Styles underperformed.  Volatility ramped across asset classes and NFP data surprised to the downside.

TREND ANALYSIS

The S&P500 ( $SPX ) dropped 2% last week:

• ~2.5% below the 50-day moving average
• ~2.5% above the 200-day moving average

All 3 technical indicators continue to highlight price weakness:

• Average Directional Index: Bearish
  • The base ADX number is on the rise, signaling a strengthening trend
• Institutional Activity: Bearish
  • Price fell further below the 50-day moving average
• On-Balance Volume: Bearish
  • Remains below the long-term average

SPX Price & Volume Chart – 2026-03-08

PERFORMANCE HIGHLIGHTS & COMPARISONS

Asset Classes

Oil ( $USO ) rocketed higher last week, gaining ~33%.  Yes, you read that right…not a typo.  Emerging Market Equities ( $EEM ) led to the downside, losing more than 8%.  Emerging Market Equities and Bonds ( $EEM, $PCY ) moved to bearish bias, Development Market Equities ( $VEA ) to Neutral, and the U.S. dollar ( $DXY ) to bullish.

Asset Class Performance – 2026-03-08

S&P500 Sectors

Energy ( $XLE ) was the lone gainer; Industrials ( $XLI ) led to the downside.  Healthcare ( $XLV ) moved to bearish, Industrials to neutral.

S&P Sector Performance – 2026-03-08

S&P500 Investing Styles

Investors fled all style factors last week.  Large Cap Growth outperformed by falling less than 1%.  Mid Cap Growth ( $IJH ) fell the most, although it had plenty of company ( $IWO, $IJJ, $MTUM ).

High Beta, Small Cap Growth & Value, Mid-Cap Growth & Value,  Momentum , Quality, and Defensives ( $SPHB, $IWO, $IWN, $IJH, $IJJ, $MTUM, $QUAL, $POWA ) all dropped to bearish bias.  Large Cap Value moved to neutral.

Sector Style Performance – 2026-03-08

COMMENTARY

Markets

The S&P500’s Volatility Index ( $VIX ) ramped higher last week, hitting 29.9 on Friday.  Equities are essentially “uninvestable” when the reading is above 29; that level signals a high probability of large price swings…particularly the negative kind.  Both the Nasdaq and Russell 2000 volatility readings ended the week above 30 as well.

When equity markets enter a sell off or a downtrend with accelerating volatility, the entire asset class gets impacted.  Small Caps & Large Caps, Growth & Value, Technology & Consumer Staples, Emerging & Developed Markets; they’re all just different flavors of equities.  So it’s no surprise that we encountered a broad sell-off last week, negatively impacting all sectors and styles.  Energy was the only “winner”, but even that performance required a +30% rally in Oil.

Speaking of oil; what a move!  Up ~13% on Friday alone.  The commodity also experience a massive move in volatility, reaching levels on par with the COVID crisis, as price responded to news out of West Asia ( more below ).

Treasury yields also rallied off of lows last week, sending bond funds lower.

Given the broad rise in volatility, it’s reasonable to expect large price moves to the downside next week.  Many institutional trading methodologies mechanically adjust holdings at pre-defined volatility levels.  The speed of the moves will boil down to urgency; can positions be shopped around in an orderly fashion, or do they have to be liquidated immediately ( e.g. margin call ).

For individual investors, it’s still the game of minimizing holdings with bearish bias ( capital preservation ) and managing positions ( trimming at overbought, adding at oversold ) that are bullish.

Macroeconomic Data & Policy

Manufacturing and Services PMI surveys showed increased activity year over year, but also showed a high level of ongoing pricing pressure.

On Wednesday, ADP employment data showed 63k jobs were added in February 2026.  On Friday, Non-Farm Payrolls showed a loss of 92k jobs during the same period, well below expectations for a gain of 59k.

Retail Sales decreased for the month of January, but beat expectations and were actually higher year over year.

Geopolitics

Hostilities in Western Asia continue to roil global markets, particularly oil and gas.    Threats to ships traversing the Strait of Hormuz led several nations ( UAE, Iraq, Kuwait ) to reduce their oil production after running out of storage space.  Saudi Arabia and Qatar halted refinery activity after experiencing drone attacks.

EYES ON THE HORIZON

The latest inflation data ( CPI & PCE ) hits the wires this week, along with the second Q4 GDP update and another jobs report.

• Monday: —
• Tuesday: —
• Wednesday: CPI
• Thursday: —
• Friday: PCE, Q4 GDP ( 2nd Revision ), JOLTS

Best to Your Week!

P.S. If you find this research helpful, please tell a friend.
If you don’t, tell an enemy.

Content Sources:
Bloomberg, CNBC, Federal Reserve Bank of St. Louis (FRED), Hedgeye, StockCharts.com,
TradingEconomics.com, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics.

Performance Methodology:
All sector performance data is sourced from ThinkorSwim and reflects price‑only returns
calculated using end‑of‑week closing data. Bias classifications follow a proprietary
Invest Safely, LLC model and update only when trend conditions meet predefined thresholds.

Disclaimer:
Invest Safely, LLC is an independent investment research and online financial media company.
Use of Invest Safely, LLC and any products available through Invest‑Safely.com is subject to
our Terms of Service and Privacy Policy.

Not a recommendation to buy or sell any security.

Stock Market Outlook: March 1st =Downtrend

The stock market outlook remains in a downtrend, with geopolitical risks primed to inject volatility into financial assets.

Gold, Utilities, and Low Beta outperformed; Crypto, Financials, and Value underperformed.  Producer prices came in higher than expected, which will sharpen the focus on this week’s employment data.

TREND ANALYSIS

The S&P500 ( $SPX ) slipped 0.4% last week, ending the back where it started:

• At the 50-day moving average
• ~5% above the 200-day moving average

The index tried to retake the 50-day moving average, but gave back the gains immediately, created another lower-high.  All 3 technical indicators are now bearish:

• Average Directional Index: Bearish
  • No change; remains bearish
• Institutional Activity: Bearish
  • Price couldn’t hold the 50-day moving average
  • 2 more distribution days brings the total to 7
• On-Balance Volume: Bearish
  • Moved to bearish after falling below the average on a lower low

SPX Price & Volume Chart – 2026-03-01

PERFORMANCE HIGHLIGHTS & COMPARISONS

S&P500 Sectors

Utilities ( $XLU ) continue to outperform, gaining 3% last week and heading all comers by a wide margin.  Financials ( $XLF ) underperformed.  Communications ( $XLC ) rallied to back to bullish.

S&P Sector Performance – 2026-03-01

S&P500 Investing Styles

Low Beta ( $SPLV ) led styles higher; Small and Midcap Value ( $IWN, $IJJ ) lagged, giving back some of their recent gains.  Momentum ( $MTUM ) fell back to neutral bias.

Sector Style Performance – 2026-03-01

Asset Classes

Gold ( $GLD ) was the best asset class last week, and is up more than 50% since turning bullish.  Bitcoin ( $IBIT ) underperformed.

Asset Class Performance – 2026-03-01

COMMENTARY

Markets

Trading and investing in equities has been a slog so far this year. You’ve seen tickers slide back and forth between bullish and bearish bias, strong earnings met with big sells offs ( **cough** Nvidia **cough** ), and overnight gaps on after-hour headlines.

The Volatility Index ( $VIX ) spent almost the entire month of February on the cusp of the “chop zone”, confirming the difficult environment we’ve experienced.

Using a mechanical system, such as the example we use for the stock market outlook, can be frustrating when markets exhibit these characteristics.  That’s one reason it’s important to diversify into other asset classes.  It’s rare that they all move sideways at the same time, so there’s always another trade, like recent trends in gold and non-US equities.

Macroeconomic Data & Policy

Producer Prices ( PPI ) surprised to the upside: headline rose 1% year over year ( y/y ), while Core increased 2.4% y/y. Not exactly a welcome sign for those expecting rate cuts.

Regarding employment trends, one of the bigger stories was Block, Inc. ( $XYZ ) announcing a strategic shift toward artificial-intelligence-focused operating model.  While most pundits expect AI to replace entry-level, white-collar positions, Block’s change came with a workforce reduction of almost 50%!  And this is for a company doing well financially.  Not exactly good news for the next employment cycle.

Geopolitics

Negotiations between U.S. and Iranian representatives stalled out during the week, resulting in military strikes during the weekend.  Equity markets are likely to open down ( Sunday night futures ), with a massive volatility spike when New York trading opens on Monday.  Oil and Gold are expected to open higher.

EYES ON THE HORIZON

The latest unemployment and jobs data hits the wires this week, along with ISM surveys.  While these data points are likely to short-term, knee-jerk reactions, geopolitical headlines are now the dominant driver.

• Monday: ISM Manufacturing PMI
• Tuesday: —
• Wednesday: ADP Employment & ISM Services PMI
• Thursday: Unemployment Claims
• Friday: NFP & Retail Sales

Best to Your Week!

P.S. If you find this research helpful, please tell a friend.
If you don’t, tell an enemy.

Content Sources:
Bloomberg, CNBC, Federal Reserve Bank of St. Louis (FRED), Hedgeye, StockCharts.com,
TradingEconomics.com, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics.

Performance Methodology:
All sector performance data is sourced from ThinkorSwim and reflects price‑only returns
calculated using end‑of‑week closing data. Bias classifications follow a proprietary
Invest Safely, LLC model and update only when trend conditions meet predefined thresholds.
All calculations are consistent across every chart on this page.

Disclaimer:
Invest Safely, LLC is an independent investment research and online financial media company.
Use of Invest Safely, LLC and any products available through Invest‑Safely.com is subject to
our Terms of Service and Privacy Policy.

Not a recommendation to buy or sell any security.

Stock Market Outlook: February 22th = Downtrend

The stock market outlook remains in a downtrend, though price has risen back to retest key levels.

Oil, Materials & Utilities, and High Beta outperformed; Consumer Staples lagged.  PCE was higher than expected, while Q4 GDP came in low due to the government shutdown.

TREND ANALYSIS

The S&P500 ( $SPX ) rose 1.1% last week, as price traded back to key levels:

• At the 50-day moving average
• ~6% above the 200-day moving average

The index bounced after sweeping the lows near 6800, but was unable to clear the 21 and 50 day moving averages with any conviction.

• Average Directional Index: Bearish
  • ADX direction indicators remain bearish
• Institutional Activity: Bearish
  • Price returned to the 50 dma on average volume
• On-Balance Volume: Neutral
  • On-balance volume is retesting its long-term average

SPX Price & Volume Chart – 2026-02-22

PERFORMANCE HIGHLIGHTS & COMPARISONS

S&P500 Sectors

Materials ( $XLB ) outperformed, closely following by Utilities ( $XLU ).  Consumer Staples ( $XLP ) underperformed.  Communications ( $XLC ) clawed its way back to neutral.

S&P Sector Performance – 2026-02-22

S&P500 Investing Styles

All investing styles ended the week in positive territory.  High Beta ( $SPHB ) led the way and Mega Cap Growth, High Dividend, and Defensives ( $OWF, $SPHD, $POWA ) brought up the rear.  Momentum ( $MTUM ) reclaimed a bullish bias.

Sector Style Performance – 2026-02-22

Asset Classes

All asset classes gained ground last week, with Oil ( $USO ) gaining almost 6% and U.S. Bonds adding 0.1%.  The U.S. Dollar ( $DXY ) strengthened to neutral bias after several weeks in bearish territory.

Sector Style Performance – 2026-02-22

COMMENTARY

Markets

Selling pressure took a breather last week; almost the entire dashboard registering a gain.  Defensive positioning remains in control, although Consumer staples experienced some profit taking.

The Volatility Index ( $VIX ) spent another week testing the “chop zone” (a reading from 20 to 30), supporting the risk-off signals provided by price and volume.

Macroeconomic Data & Policy

New orders for durable goods fell 1.4% in January, which was a bit less than expected.

Headline PCE Price Index rose 2.9% YoY, up from 2.8% in November and driven by the cost of services. Core PCE rose 3.0% YoY, versus 2.8% in November.

Real GDP grew 1.4% in Q4 2025, a sharp slowdown from 4.4% in Q3 and lower than 1.9% in 2024 Q4. Government spending contracted ~5% due to the fall 2025 shutdown, bringing down the overall figure by almost 1%.

FOMC minutes showed a hawkish pause in place,, with most members wanting to hold rates steady until inflation shows further improvement.

The Supreme Court ruled 6–3 that President Trump’s tariff program exceeded presidential authority under the International Emergency Economic Powers Act (IEEPA).  Within hours of the ruling, the Trump administration announced a new, 10% global tariff, citing authority under the Trade Act of 1974 instead of the IEEPA.

Geopolitics

The U.S. continues to build up military assets in the Middle East. Earlier in the week, there was some hope for an agreement as talks in Geneva resulted in some “guiding principles”. But the two sides remain far apart, per sources (Reuters.com: US and Iran slide towards conflict as military build-up eclipses talks).

EYES ON THE HORIZON

Several Fed members speak next week; PPI comes out Friday

• Monday: —
• Tuesday: 7 Fed Speeches
• Wednesday: —
• Thursday: —
• Friday: PPI

Best to Your Week!

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Content Sources:
Bloomberg, CNBC, Federal Reserve Bank of St. Louis (FRED), Hedgeye, StockCharts.com,
TradingEconomics.com, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics.

Performance Methodology:
All sector performance data is sourced from ThinkorSwim and reflects price‑only returns
calculated using end‑of‑week closing data. Bias classifications follow a proprietary
Invest Safely, LLC model and update only when trend conditions meet predefined thresholds.
All calculations are consistent across every chart on this page.

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