Stock Market Outlook: February 15th = Downtrend

The stock market outlook remains in a downtrend after institutional selling sent price below key levels again.

Non-U.S. Developed Markets, Utilities, and and High Dividends outperformed; Bitcoin, Financials, and Mega-Cap Growth lagged.  Non-farm payrolls were stronger than expected and inflation eased slightly.

TREND ANALYSIS

The S&P500 ( $SPX ) fell 1.4% last week, as price traded to and through key levels:

• ~1% below the 50-day moving average
• ~5% above the 200-day moving average

The index experience another volatile week, but failed to make a higher high.  And then the technical indicators fell further into bearish territory.

• Average Directional Index: Bearish
  • • ADX direction indicators remain bearish
    • The overall trend is still extremely weak
• Institutional Activity: Bearish
  • Price broke below the 50 dma on elevated trading volume again
  • 2 distribution days brings the total to 6
• On-Balance Volume: Bearish
  • On-balance volume moved to bearish after closing below a long-term average

SPX Price & Volume Chart – 2026-02-15

PERFORMANCE HIGHLIGHTS & COMPARISONS

S&P500 Sectors

Utilities ( $XLU ) outperformed by a wide margin, while Financials ( $XLF ) underperformed.  Communications and Financials ( $XLC, $XLF ) dropped to bearish bias, and Utilities ( $XLU ) ramped to bullish.

S&P Sector Performance – 2026-02-15

S&P500 Investing Styles

High Dividend stocks ( $SPHD ) led upside, and Mega Cap Growth ( $OWF ) headed the downside and fell back to bearish bias.  Momentum ( $MTUM ) slipped to neutral.

Sector Style Performance – 2026-02-15

Asset Classes

Non-U.S. Developed Markets ( $VEA ) led asset class returns to the upside, while Bitcoin ( $IBIT ) led to the downside.  DM bonds ( $BNDX ) strengthened again, moving up to bullish bias.  U.S. equities ( $SPY ) moved to bearish.

Asset Class Performance – 2026-02-15

COMMENTARY

Markets

U.S. equity sectors show the defensive posture of capital flows: strong performance in Industrials, Materials, Energy, Healthcare, and Staples.  The breakout in Utilities, along with the move in Real Estate, benefited from a sharp drop in U.S. Treasuries.

The Volatility Index ( $VIX ) spent the week on the doorstep of Hedgeye’s “chop zone” (a reading from 20 to 30), supporting the general risk-off signals provided by price and volume.

Macroeconomic Data & Policy

Non-Farm Payrolls showed the U.S. added 130,000 jobs in January; above expectations for 70,000 and the Decembers increased of 48,000.

Existing home sales fell 4.4% YoY; the sharpest drop in ~4 years.

January headline CPI slowed from 2.7% to 2.4%; Core figures eased from 2.6% to 2.5%. Energy prices fell slightly, driven by a drop in gasoline prices.

Geopolitics

A quiet week, with no major geopolitical events influencing markets action.

EYES ON THE HORIZON

U.S. Markets are closed Monday for the Presidents Day Holiday.  Chinese markets will be closed for an entire week (Monday, Feb 16 through Monday, Feb 23) for Lunar New Year Celebrations.

• Monday: U.S. Markets Closed
• Tuesday: n/a
• Wednesday: Housing Starts, Durable Goods, FOMC Minutes
• Thursday: n/a
• Friday: PCE

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 8th = Downtrend

The stock market outlook shifted to a downtrend on Thursday, but may bullish biases remain intact.  A continuation from Friday’s reversal will make the change short lived.

Gold, Consumer Staples, and Mid-Cap Value outperformed; Oil/bitcoin, Communications, and Large-Cap growth lagged. Macro data was mixed, and non-farm payroll data was delayed until this week, joining retail sales, and CPI.

TREND ANALYSIS

The S&P500 ( $SPX ) fell 0.1% last week, as price traded to and through key levels:

• ~1% above the 50-day moving average
• ~7% above the 200-day moving average

Last week’s volatility whipped around the technical indicators; 2 of 3 were bearish as of Thursday’s close, moving the outlook to a downtrend.  Institutional activity recovered Friday; one more signal change is needed.

• Average Directional Index: Bearish
  • ADX direction indicators remained bearish all week
• Institutional Activity: Bullish
  • Price broke the 50 dma on elevated trading volume Thursday, moving the signal to bearish and shifting the outlook.
  • Price recovered bullishly Friday morning, flipping the indicator back to bullish.
• On-Balance Volume: Neutral
  • On-balance volume moved to neutral on Tuesday, testing it’s trendline for the first time since August

SPX Price & Volume Chart – 2026-02-08

PERFORMANCE HIGHLIGHTS & COMPARISONS

S&P500 Sectors

Consumer Staples ( $XLP ) outperformed, though several sectors kept pace.  Communications ( $XLC ) underperformed.  Consumer Discretionary and Technology ( $XLY, $XLK ) fell to bearish bias.  Communications and Utilities ( $XLC, $XLU ) moved to neutral, and Financials ( $XLF ) moved back up to bullish.

S&P Sector Performance – 2026-02-08

S&P500 Investing Styles

Mid-cap growth ( $IJH ) led upside performance, and Large Cap Growth ( $IWF ) was the worst style. Last week’s bias changes reversed:  Mega Cap Growth ( $OEF ) returned to neutral bias, and Defensives ( $POWA ) to bullish.

Sector Style Performance – 2026-02-08

Asset Classes

Gold ( $GLD ) led asset class returns. Oil reversed course from last week’s gains, but Bitcoin ( $IBIT ) was the biggest loser again.  DM bonds ( $BNDX ) moved up to neutral bias, and EM bonds ( $PCY ) retreated to neutral.

Asset Class Performance – 2026-02-08

COMMENTARY

Markets

Institutions were selling, but selectively.  Index prices fell below key levels, then recovered.  The S&P500 trend indicators flipped to bearish, but the $SPY bias is back to bullish.  Some names broke out, some broke down.  Talk about mixed messages.

• Traders sold large cap growth ( $IWF ) and technology stocks ( $XLC, $XLY, $XLK ).
• Traders bought Staples, Energy, Industrials, Materials ( $XLP, $XLE, $XLI, $XLB ) and value stocks ( $IWN, $IJJ, $IWX ).

Tech companies are the largest weights in general indexes, like the S&P500 and the Nasdaq 100, so their capital flows have an oversized impact on index price movement.  Check out the equal weight version of the S&P500 ( $RSP ): price broke out to new highs on Friday!

$RSP Price & Volume Chart – 2026-02-08

I’d say the market is mixed, the goal of these weekly exercises is preserving capital and reducing losses, so erring on the side of caution is the correct course of action.  There is always another trade, but you have to have capital to participate.

Macroeconomic Data & Policy

January ISM Manufacturing PMI improved to 52.6%, representing the first expansion in 12 months. ISM Services PMI remained steady at 53.8%.

Job openings (JOLTs) fell year over year, signaling softer labor demand.  And consumer sentiment was better than expected, but well below last year’s levels.

Non-farm payrolls were delayed a week due to the government shutdown.

Geopolitics

According to a U.S. trade representative, the U.S. is developing plans with Mexico, the European Union and Japan to implement minimum prices for critical, rare-earth minerals, triggering a sell-off in the sector.

The partial U.S. government shutdown ended last week.

EYES ON THE HORIZON

This week brings several important data releases:

• Monday: —
• Tuesday: Retail Sales
• Wednesday: Rescheduled NFP
• Thursday: Existing Home Sales
• Friday: CPI

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 1st = Uptrend

The stock market outlook continues to show an uptrend in place for the S&P500, indicated by bullish designations for 2 of 3 technical indicators.

Oil, Energy, and High Dividend payers outperformed, metals / crypto crashed, reaction to earnings was mixed, and the FOMC held rates steady.  A partial government shutdown, ISM survey results and jobs data will shape the week ahead.

TREND ANALYSIS

The S&P500 ( $SPX ) rose 0.3% last week, continuing to trade above key levels:

• ~1% above the 50-day moving average
• ~8% above the 200-day moving average

Despite the volatile price action, indicators start the week unchanged:

• Average Directional Index: Bearish
  • ADX direction indicators flipped to bearish during the week, but reversed on Thursday
• Institutional Activity: Bullish
  • Selling volume increased last week, but only triggered one distribution day and price remains above the 50 dma, keeping a bullish trend in place
• On-Balance Volume: Bullish
  • On-balance volume remains above its trendline

SPX Price & Volume Chart for 2026-02-01

PERFORMANCE HIGHLIGHTS & COMPARISONS

S&P500 Sectors

Energy ( $XLE ) outperformed for the second consecutive week; Healthcare ( $XLV ) underperformed.  Technology ( $XLK ) eased back to neutral after a slew of Mag  7 earnings, while Financials ( $XLF ) regained neutral bias.

S&P Sector Performance – 2026-02-01

S&P500 Investing Styles

High Dividend ( $SPHD ) led upside performance, which hasn’t happened in a long time.  But it was Small Cap Growth falling 3% that really stood out within sector styles.  Mega Cap Growth ( $OEF ) returned to bullish bias, and Defensives ( $POWA ) hit neutral.

Sector Style Performance – 2026-02-01

Asset Classes

The moves in metals continue to dominate global headlines.  Oil ( $USO ) quietly led asset classes higher last week, gaining almost 8%.  Bitcoin ( $IBIT ) was the biggest loser, as the leverage continues to be unwound across the cryptocurrency space.  U.S. Bonds ( $IEF ) moved up to neutral bias, and EM bonds ( $PCY ) improved to bullish.

Asset Class Performance vs. U.S. Dollar – 2026-02-01

COMMENTARY

Markets

The metals rally we discussed last weekend reversed violently on Thursday:  Silver futures collapsed from a high of $121.79 to a low of $74! That’s a 39% peak‑to‑trough unwind in less than 2 days. Platinum’s overall move was similar, but took a few more sessions.

Macroeconomic Data & Policy

Mega‑cap tech delivered generally good headline numbers, but weaker than expected guidance and/or margin compression caused a few names to sell off.

December PPI rose 3.0% year-on-year, unchanged from November but higher than expectations for 2.7%.  Increases in services prices drove the surprise upside.

The FOMC held rates steady and emphasized a data‑dependent path forward. On Friday, President Trump announced Kevin Warsh as his nominee to replace Powell as head of the Federal Reserve.  A lot of ink was spilled on what Mr. Warsh has said in the past, regarding Fed policy.  What he will do if/once he’s confirmed as Chairman is another matter.  The current expectation is a mix:  hawkish on the balance sheet ( reducing liquidity ) and dovish on interest rates ( potential cuts ).

Geopolitics

A partial U.S. government shutdown began over the weekend; a funding package passed the Senate late Friday, but still needs approval from the House of Representatives on Monday.

EYES ON THE HORIZON

This week brings several important data releases:

• Monday: ISM Manufacturing PMI
• Tuesday: December JOLTs Job Openings
• Wednesday: ISM Services PMI
• Thursday: —
• Friday: Non Farm Payrolls & 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.
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 entering the Week of January 25th = Uptrend

• Average Directional Index: Bearish
• Institutional Activity: Bullish
• On-Balance Volume: Bullish

ANALYSIS
The stock market outlook continues to show an uptrend in place for the S&P500.

The S&P500 ( $SPX ) lost 0.4% last week.  The index sits ~1% above the 50-day moving average and ~8% above the 200-day moving average.

Price briefly dipped below the 50-day when the market opened on Tuesday (and a neutral bias), but rebounded the following day.  The sharp move flipped ADX directional indicators, but wasn’t accompanied by a wave of institutional selling, so the other signals remain bullish.

SPX Price & Volume Chart for Jan 25 2026

PERFORMANCE COMPARISONS
Energy ( $XLE ) outperformed and Utilities ( $XLU ) underperformed last week.    Communications ( $XLC ) regained bullish bias, while Financials ( $XLF ) dropped to bearish bias.

Energy and Industrials benefited from the rotation out of Technology and Mag-7 names, with Consumer Staples not far behind.  Healthcare, one of the strongest sectors coming into 2026, consolidated during the past month.

S&P Sector Performance from Week 05 of 2026

Small Cap Value ( $IWN ) led all performers for the third consecutive week, but the overall return return was barely break-even.  High Beta ( $SPHB ) was the worst sector style.  There were no changes in bias.

Despite the weak price action, Small and Mid-caps continue to outperform ( Value & Growth ), again highlighting a rotation out of Large and Mega Cap tech, rather than outright selling of equities.

Sector Style Performance from Week 05 of 2026

Gold ( $GLD ) surged higher last week, leaving other asset classes in the dust. Bitcoin ( $IBIT ) was the worst performer, giving back it’s recent gains and falling to bearish bias…as did the U.S. Dollar ($DXY ).

Asset Class Performance from Week 05 2026

COMMENTARY
For 2026, we’ve updated the asset comparison table:  equities and bonds for Development Markets ( “DM” ) and Emerging Markets ( “EM” ).  The additions won’t overtake volatile assets like bitcoin, or more recently precious metals, since they’re both beholden to their “parent” asset classes.  They do provide more insight into global capital flows, which will be useful as we all navigate the 4th turning.

If you aren’t familiar with the “turnings” or generational cycles, do yourself a favor and research Social Cycle Theories; they provide critical insight into the current social and geopolitical upheaval we’re seeing today.

Sidenote:  If you haven’t read or listened to the Neil Howe’s books on the subject, do yourself another favor and get them.  Or do me a favor and get one or both via these Amazon affiliate links:

• The Fourth Turning: An American Prophecy – What the Cycles of History Tell Us About America’s Next Rendezvous with Destiny
• The Fourth Turning Is Here: What the Seasons of History Tell Us about How and When This Crisis Will End

Speaking of precious metals, gold and silver continue their historic runs, breaking to and through all time highs on an almost daily basis. Other metals and rare earth elements ( Palladium, Platinum, Uranium, Copper, etc. ) are moving as well, though not as dramatically. If you’re allocating to those assets, make sure you’re managing the size of those positions and booking gains when price is in overbought territory.

The final figure for third quarter GDP was +4.4%; higher than initial estimates and year over year, putting the U.S. economy firmly on the growth side.  The positive rate of change should show up in 2025 Q4 figures (when released), and carry through this quarter too (Q1 2026).

November PCE ( headline and core ) increased slightly versus October readings.  Given the issues with data collection during the government shutdown, don’t put too much faith in these figures.

In the “tariff” space, Greenland-related tariffs were dropped, after reports of a “framework for a future deal” regarding the Arctic region with NATO. Then on Saturday, President Trump threatened a 100% tariff on all Canadian imports if Canada finalizes its new trade deal with China (lowering tariffs on Chinese electric vehicles in exchange for reduced Chinese tariffs on Canadian farm products). It’s likely a war of words will ensue.  After each side has postured enough to satisfy their constituents, some kind of agreement will be reached.

This week, the FOMC releases their latest decision on interest rates ( Wednesday ), and December PPI is released Friday.  We also get Mag 7 earnings from $AAPL, $TSLA, $MSFT, and $META.  And there’s the looming possibility of another shutdown for the U.S. government at the end of the week.

Best to Your Week!

PS: If you’re interested in ways to incorporate generational cycle theory into your portfolio, Neil Howe co-leads a fund with Hedgeye Asset Management: https://www.hedgeyeam.com/heft (not an affiliate link or investment advice, just a practical application).

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

Sources: Bloomberg, CNBC, Federal Reserve Bank of St. Louis, Hedgeye, Stockcharts.com, TradingEconomics.com, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics, TradingEconomics.com

Invest Safely, LLC is an independent investment research and online financial media company.  Use of Invest Safely, LLC and any other 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 entering the Week of January 18th = Uptrend

• Average Directional Index: Bullish
• Institutional Activity: Bullish
• On-Balance Volume: Bullish

ANALYSIS
The stock market outlook maintained an uptrend after navigating an eventful week geopolitical and policy headlines.

The S&P500 ( $SPX ) lost 0.4% last week.  The index sits ~2% above the 50-day moving average and ~9% above the 200-day moving average.

All three technical indicators are bullish to start the week.

SPX Price & Volume Chart for Jan 18 2026

PERFORMANCE COMPARISONS
Real Estate ( $XLRE ) outperformed and switch to bullish bias, while Communications and Financials ( $XLC & $XLF ) tied for last place.  Communications also fell to neutral bias.

S&P Sector Performance from Week 04 of 2026

Small Cap Value ( $IWN ) led all performers for the second week in a row.  Large cap growth ( $IWF ) underperformed and fell to bearish bias.  Mega cap growth ( $OEF ) also eased back to neutral bias, while Low Beta ( $SPLV ) moved back to bullish from neutral.

Sector Style Performance from Week 04 of 2026

Bitcoin ( $IBIT ) outperformed last week and managed to regain bullish bias for the first time in several weeks.  U.S. Bonds and Equities ( $IEF & $SPY ) lagged.  Bonds also fell back to bearish bias.

Asset Class Performance from Week 04 2026

COMMENTARY
Last week was a long year!  There were many news-worthy events, including:

• Federal Reserve Chair Jerome Powell was served grand jury subpoenas by the U.S.
• Justice Department regarding renovations at the Fed’s headquarters
• The Supreme Court did NOT release an opinion on the legality of U.S. tariffs
• U.S. military asset mobilization in response to ongoing protests in Iran.

The Trump administration added to the fray, announcing or proposing:

• A one-year 10% cap on credit card interest rates
• Fannie Mae and Freddie Mac purchasing $200 billion in mortgage-backed securities,
• A temporary delay in plans to garnish wages and offset tax returns for defaulted student loan borrowers

After the close on Friday, new tariffs were announced, this time on countries that oppose the U.S. annexation/acquisition of Greenland.

Macro-wise, December CPI (headline and core) remained steady versus November readings.  Headline was down slightly year over year, while core inflation slowed significantly (down from 3.2% in Dec 2024).

November PPI (headline and core) came in at 3%, slightly above October readings, but lower than December last year.

Earnings season also kicked off, with a reminder of the ongoing, k-shaped economy: Banks with wealth management and investment banking business models reported significant growth, while those with a “mass-market” focus saw rising credit reserves (i.e. preparing for high loan defaults) and stagnant revenue growth. The proposed 10% cap on credit card interest rates didn’t help stock prices either.

And, just in case you were thinking “nothing would surprise me at this point”: a former policy expert in the UK said the Bank of England must plan for a financial crisis triggered by aliens.

This week, U.S. markets are closed Monday for the Martin Luther King Jr. Day.  Final 2024 Q3 GDP and PCE for October and November will be released Thursday.

Best to Your Week!

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

Sources: Bloomberg, CNBC, Federal Reserve Bank of St. Louis, Hedgeye, Stockcharts.com, TradingEconomics.com, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics, TradingEconomics.com

Invest Safely, LLC is an independent investment research and online financial media company.  Use of Invest Safely, LLC and any other 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 entering the Week of January 11th = Uptrend

• Average Directional Index: Bullish
• Institutional Activity: Bullish
• On-Balance Volume: Bullish

ANALYSIS
The stock market outlook maintains an uptrend, despite geopolitical turmoil and news-driven volatility.

The S&P500 ( $SPX ) rose 1.6% last week.  The index sits ~2% above the 50-day moving average and ~10% above the 200-day moving average.

All three technical indicators are bullish to start the week.  Price broke out of a recent trading range and the index dropped a few distribution days from the overall count.

SPX Price & Volume Chart for Jan 11 2026

PERFORMANCE COMPARISONS
Consumer Discretionary ( $XLY ) outperformed by a wide margin, thought Industrials  ( $XLI ) was a close second.  Utilities ( $XLU ) underperformed; the only sector in the red.  Consumer Discretionary and Consumer Staples ( $XLP ) improved to bullish bias.

S&P Sector Performance from Week 03 of 2026

All sector styles made headway last week, but it was Small Cap Value ( $IWN ) leading the charge.  Interestingly, the “Value” category ( $IWN, $IJJ, $IWX ) has improved more than all other styles over the past 4 weeks, on a relative basis.  High Dividend ( $SPHD ) underperformed.  Low Beta ( $SPLV ) moved back to neutral; High Dividend and Defensives ( $POWA ) improved to bullish.

Sector Style Performance from Week 03 of 2026

Gold ( $GLD ) returned to the win column last week, leading assets higher.  Bonds ( $IEF )   lagged.  Oil ( $USO ) moved back to bullish bias after almost 4 months in bearish territory.  Time will tell if it’s a retest or a breakout.  Bonds and U.S. dollar ( $DXY ) improved to neutral bias as well.

Asset Class Performance from Week 03 2026

COMMENTARY
In addition to geopolitical headlines, policy by social media ramped up again last week, with the U.S. defense sector in the crosshairs.  President Trump called out contractors and executives for their high dividends, stock buyback programs, and compensation packages, which sent most of the sector lower midweek.  A few hours later, he requested for a $1.5 trillion dollar defense budget for 2027 ( +66% vs. 2026 ), boosting stocks back to where they were.

After market hours on Friday, he declared a one-year ceiling of 10% on credit card interest rates.  Expect more news-drive volatility throughout the year, as political parties pander position ahead of mid-term elections.

December ISM Manufacturing PMI was 47.9 in December 2025, falling from November and below forecasts.  It’s the 3rd month of declines, and the lowest level since October 2024.  Services PMI  was 54.4, up from November and above forecasts.

Job openings ( JOLTS ) fell month over month, falling short of expectations and hitting the lowest level since September 2024.  December Non-farm Payrolls fell in December, coming in below a downwardly revised November figure, forecasts, and far off last December’s 323k number.  The downward revisions hint that employment is weaker than initial reporting suggests, which will influence the FOMC’s next interest rate decision.

Source: https://x.com/KobeissiLetter/status/2010079561581498856

This week’s data releases include December CPI and PPI figures, as well as the start of earnings season.

Source:  https://x.com/eWhispers/status/2009633514765877736

Best to Your Week!

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

Sources: Bloomberg, CNBC, Federal Reserve Bank of St. Louis, Hedgeye, Stockcharts.com, TradingEconomics.com, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics, TradingEconomics.com

Invest Safely, LLC is an independent investment research and online financial media company.  Use of Invest Safely, LLC and any other 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 entering the Week of January 4th = Uptrend

• Average Directional Index: Bearish
• Institutional Activity: Mixed
• On-Balance Volume: Bullish

ANALYSIS
Happy New Year!  The stock market outlook kicks off 2026 in an uptrend, with asterisks.

The S&P500 ( $SPX ) fell 1% last week.  The index sits 1% above the 50-day moving average and ~10% above the 200-day moving average.

The ADX directional indicators had moved into bullish territory over the holidays, but fell back to bearish Friday; the main average shows a market without trend, corresponding to the index moving sideways since the end of October.  The SPX is still above the 50-day moving average, though distribution days are high.  The two days of elevated selling during the holidays came on below average trading volumes, so not the strongest signal, but a bearish one nonetheless.  So the market outlook remains in an uptrend, while we wait for a breakdown or breakout from the recent trading range.

SPX Price & Volume Chart for Jan 04 2026

PERFORMANCE COMPARISONS
We’ll kick off performance comparisons with a look at annual returns for the stock market outlook. During 2025, the $SPX netted a 942 point gain, from the January 2nd open to the December 31st close, for a gain of 16%.  During the same time period, the stock market outlook signals triggered six times, creating a net increase of ~1216 points, for a gain of 20.6%.

Outlook Performance for 2025

The stock market outlook continues to function as intended: lowering risk of loss.  Using the 3-signal combination improved returns by 4.6% versus buying and holding the index.  Said another way, these signals reduced losses from the first quarter drawdown by ~5%.

Returning to the near term, Energy ( $XLE ) outperformed last week and Consumer Discretionary ( $XLY ) underperformed.  Energy and Technology ( $XLK ) slipped back to neutral bias.

S&P Sector Performance from Week 02 of 2026

High Dividend ( $SPHD ) stocks were the only style to close with a gain; the rest were led lower by Small Cap Growth ( $IWO ).  Small Cap Growth, along with Defensives ( $POWA ) , dropped to Bearish bias, while Large Cap Growth, Small Cap Value, and Momentum ( $IWF, $IWN, $MTUM ) slipped to neutral (all from bullish).

Sector Style Performance from Week 02 of 2026

US Bonds ( $IEF ) were the “best” asset class with a return of 0.1%.  That said, they also shifted from neutral to bearish bias.  Gold ( $GLD ) leading to the downside.

Asset Class Performance from Week 02 2026

COMMENTARY
As we head into January, the overall price and volume action shows the market consolidating for much of the 4th quarter.  There’s almost no trend to speak of (per ADX), and institutional investors were shifting their holdings around: high volume selling on the indexes without major price declines.  The rotation of flows also showed up in sector biases flipping back and forth for much of the 4th quarter.

On Saturday, investors woke up to news that the Venezuelan President Nicolás Maduro had been removed from office by U.S. forces.  Our first peak at market reaction will be Sunday night futures, but it’s safe to assume there will be some volatility when the U.S. markets open tomorrow.

Looking ahead, we’ll get ISM, JOLTS, and NFP later this week.  And earnings season kicks off the following week with large banks reporting.

Best to Your Week!

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

Sources: Bloomberg, CNBC, Federal Reserve Bank of St. Louis, Hedgeye, Stockcharts.com, TradingEconomics.com, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics, TradingEconomics.com

Invest Safely, LLC is an independent investment research and online financial media company.  Use of Invest Safely, LLC and any other 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