The Safe Investing Blog

Stock Market Outlook entering the Week of May 4th = Uptrend

• ADX Directional Indicators: Neutral
• Institutional Activity (Price & Volume): Uptrend
• On Balance Volume Indicator: Uptrend

ANALYSIS
The stock market outlook shifted back to an uptrend last Monday, as buying pressure flooded into equities.  Along with the market, many sectors also shifted to a bullish bias.

The S&P500 ( $SPX ) rose 2.9% last week.  The index sits ~2% above the 50-day moving average and ~1% below the 200-day moving average.

SPX Price & Volume Chart for May 04 2025

Institutional activity remains in an uptrend; below average trading volume remains a concern.  On-Balance volume ( OBV ), which was on the verge of shifted coming into last week, confirmed its signal Monday and moved the overall outlook back to an uptrend.  The Direction Indicator ( ADX ) shifted to neutral on Friday.

S&P Sector Performance for Week 19 of 2025

Industrials ( $XLI ) led the way last week, rising more than 4%.  Energy ( $XLE ) was the only sector without a gain, owing to a large drop in oil prices.  Most sectors moved back to bullish bias:

• Communications ( $XLC )
• Consumer Discretionary ( $XLY )
• Consumer Staples ( $XLP )
• Financials ( $XLF )
• Industrials ( $XLI )
• Materials ( $XLB )
• Real Estate ( $XLRE )
• Technology ( $XLK )

Sector Style Performance for Week 19 of 2025

All style funds ended the week with gains; Momentum ( $MTUM ) was the highest and High Dividend ( $SPHD ) was the lowest.  Most styles returned to bullish bias as well, though small and mid-cap value are still working through their recent losses.

Asset Class Performance for Week 19 2025

No surprise here; U.S. equities ( $SPY ) led the way higher last week.  Oil ( $USO ) collapsed on headlines that OPEC+ agreed to boost output in June.  Bonds ( $IEF ) continued to waffle, falling back to neutral bias on the stronger-than-expected jobs data.

COMMENTARY
After an impressive stretch of higher closes, a majority of equity sectors and styles show bullish bias now.  The break above the 50-day moving average and 5600 was important; now the index needs to deal with the 200-day and the 5800 resistance level.

Actually, any pullback or consolidation would be the ideal time to deploy capital, giving equities time to cool off, since they’re currently overbought.  Use the watchlists you’ve been updating and look for stocks breaking out out of consolidation phases and price patterns with higher volume.  And if you do deploy capital, keep those losses small if the trade turns against you.

Despite the bullishness of equities, the macroeconomic picture remains murky at best.

April Non-Farm Payrolls (NFP) data was slightly lower than March, but well above expectations despite uncertainty from all the tariff announcements.

PCE continues to be a challenge for tea-leaf readers: March inflation was inline with expectations, but February data was revised significantly higher (Headline up 20 bps from 2.5% to 2.7% and Core up 30 bps from 2.7% to 3%).  Given recent trends, it’s reasonable to assume March inflation data is higher than reported and will be revised next month.

The advanced Q1 GDP came in at -0.3%, down from +1.6% in 2024 Q1 and below estimates for +0.3%.   A 41.3% surge in imports did the most damage, as businesses stockpiled goods in an attempt to mitigate higher costs from tariffs.  Consumer spending and federal government expenditures were also lower.

We need another month or two before seeing the full effect of Liberation Day announcements, as inventories, supply chains, and shipping normalize.  And that data won’t include any adjustments, or lack thereof, to tariff policies that occur in the interim.

Four of the “Magnificent 7” reported better than expected earnings, but guidance was mixed:

• Meta reported higher revenue & earnings, and gave positive guidance
• Microsoft reported higher revenue & earnings, and gave positive guidance
• Apple reported higher revenue & earnings, and gave lukewarm guidance
• Amazon’s reported higher revenue & earnings, and gave weak guidance

This week we get more earnings and a FOMC interest rate decision.  The committee likely keeps interest rates unchanged, since inflation and labor data show a “neutral” picture and imports clouded Q1 economic figures.

Best to Your Week!

P.S. If you find this research helpful, please tell a friend.
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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

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 April 27th = Downtrend

• ADX Directional Indicators: Downtrend
• Institutional Activity (Price & Volume): Uptrend
• On Balance Volume Indicator: Neutral

ANALYSIS
The stock market outlook remains in a downtrend as we wait for another indicator to turn bullish.

The S&P500 ( $SPX ) ) rose 4.6% last week.  As of Friday, the S&P500 reached a key support-turned-resistance level, sitting ~2% below the 50-day moving average and ~4% below the 200-day moving average.

SPX Price & Volume Chart for Apr 27 2025

The Direction Indicator ( ADX ) remains bearish to start the week.  Institutional activity moved into an uptrend last Tuesday. Trading volume wasn’t spectacular, so extra caution is warranted and the index still needs to regain the 50-day moving average.  On-Balance volume ( OBV ) hit the trendline on Friday and needs another day to confirm the change to an uptrend.

S&P Sector Performance for Week 18 of 2025

Technology ( $XLK ) was the best sector last week, erasing almost half it’s loss since turning bearish. Consumer Staples ( $XLP ) was the worst performer, the only sector to register a loss, and it went back to Neutral bias.  Utilities ( $XLU ) improved to Bullish, while the other sectors need a bit upside more before flipping.

Sector Style Performance for Week 18 of 2025

High Beta ( $SPHB ) was the best performing style last week; Low Beta ( $SPLV ) the worst.  Large Cap Value, Momentum, and Defensives ( $IWX, $MTUM, $POWA ) joined Low Beta with a neutral bias, while the other styles remain bearish.

Asset Class Performance for Week 18 2025

Bitcoin ( $IBIT ) soared last week, while Oil ( $USO ) and Gold ( $GLD ) gave back some of their recent gains.  Bitcoin and Bonds ( $IEF ) shifted from neutral to bullish bias, although bonds have waffled recently.

COMMENTARY
While the overall market outlook is on the verge of signaling an uptrend, recent gains still appear to be part of a counter-trend rally.  A majority of the sectors and styles aren’t bullish bias yet, overall trading volume has been below average, and there’s a limited number of high quality growth stocks breaking out of quality price patterns.  Stocks that were showing signs of strength, such as Consumer Staples, fell victim to profit taking last week.

Macro-wise, outside of any potential tariff, geopolitical, or Federal Reserve related headlines, the market will need to digest quite a few earnings releases this week, along with March jobs data, March PCE, and the first Q1 GDP estimate.

I wouldn’t be at all surprised to see the index reach the 5600 level and retest its 50-day moving average this week, as that is a typical price pattern after a volatile sell-off.  That’s also the level required to shift the index to a bullish bias and move out of counter-trend rally territory.  Keep in mind almost all equities are already overbought at the current levels, so reducing some exposure as we approach resistance is prudent; much like the set-up for gold heading into last week.

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

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 April 20th = Downtrend

• ADX Directional Indicators: Downtrend
• Institutional Activity (Price & Volume): Downtrend
• On Balance Volume Indicator: Downtrend

ANALYSIS
The stock market outlook remains in a downtrend.

The S&P500 ( $SPX ) fell 1.5%.  The index sits ~7% below the 50-day moving average and ~8% below the 200-day moving average.

SPX Price & Volume Chart for Apr 20 2025

All three technical indicators ( ADX, OBV, and Institutional Activity ) remain in bearish territory.

S&P Sector Performance for Week 17 of 2025

Energy was the best sector last week, with Real Estate not far behind.  Consumer Discretionary was the worst performer.  Consumer Staples is the first sector to return to a bullish bias, while Utilities improved to neutral.

Sector Style Performance for Week 17 of 2025

High Dividend was the best performing style last week; Large Cap Growth the worst.  Low Beta shifted from bearish to neutral.

Asset Class Performance for Week 17 2025

All asset classes performed well last week as the U.S. dollar continues to fall.  Bitcoin and Oil outperformed.  Bonds shifted to neutral from bearish.

COMMENTARY
A relatively quiet week, compared to the rest of April, with only one day of headline induced volatility.  As volatility recedes, don’t be surprised if some of the safety trades also ease a bit as well.  Gold is up 25% since turning bullish bias, so now is a great time to lock in some of the gains.

U.S. Federal Reserve Chair Jerome Powell spoke at the Economic Club of Chicago on Wednesday, acknowledging that the U.S. economy has slowed, but not enough to warrant any action by the FOMC.  He expressed concern about uncertainty from the recent tariff announcements, and stated that the Fed would act if inflation materialized. To market participants, that sounded more like rate hikes than rate cuts.

Perhaps more impactful was Powell’s response to questions about the “Fed put” and whether the central bank would step in if markets plummet. Powell said “no” and then stated that “Markets are struggling with a lot of uncertainty and that means volatility. But having said that, markets are functioning…They’re orderly and they’re functioning just about as you would expect them to function.” (1)

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

(1) https://www.reuters.com/markets/us/fed-chair-powell-deliver-fresh-economic-view-tariffs-inject-uncertainty-2025-04-16/

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 April 13th = Downtrend

• ADX Directional Indicators: Downtrend
• Institutional Activity (Price & Volume): Downtrend
• On Balance Volume Indicator: Downtrend

ANALYSIS
The stock market outlook remains in a downtrend after another historic week for U.S. equities.

After ALL THAT, the S&P500 ( $SPX ) rose 5.7%.  The index sits ~7% below the 50-day moving average and ~7% below the 200-day moving average.  The index filled one of the gaps mentioned last week ( 5300 to 5400 ); the other one ( 5500 to 5600 ) remains unfilled.

SPX Price & Volume Chart for Apr 13 2025

All three technical indicators ( ADX, OBV, and Institutional Activity ) remains in bearish territory.  No surprises here.

S&P Sector Performance for Week 16 of 2025

Almost all sectors recovered some ground last week, with the Tech sector leading the way.  Real Estate fell just shy of break even.  Consumer Staples shifted back to Neutral bias; all the other sectors remain bearish.

Sector Style Performance for Week 16 of 2025

All sector styles registered a gain last week, with Momentum scoring the largest gain. No changes in bias; all styles remain bearish.

Asset Class Performance for Week 16 2025

Gold ( $GLD ) was the best asset last week, though equities weren’t far behind.  Bonds ( $IEF ) and the dollar were the worst asset classes.  Bonds also shifted to a bearish bias due to the recent rise in rates.

COMMENTARY
Another wild week for financial markets is in the books.  Given the level of uncertainty around outcomes from the new U.S. tariff regime and diplomacy by social media, expect the volatility to continue.

Lost in the noise was improved inflation data.  Headline and Core CPI came in lower than expectations, which was welcome news for those hoping for rate cuts at the next FOMC meeting.

March producer prices (PPI) were also lower in March.

The first set of bank earnings beat expectations, but their outlooks didn’t instill a lot of confidence about the rest of the year.  Long range planning requires some level of certainty, and the “price” of waiting 90 days is much lower than the cost of a strategic misstep.

It’s a complex system at work, which means there many “unintended” or “unanticipated” reactions that will catch investors off guard.  Rather than try to predict what will happen, watch for more constructive price action: the return of bullish biases, stocks breaking out of solid bases with higher volume, $VIX<20.  Until then, build your watchlist rather than deploy capital.  The S&P500 has averaged 7% moves intraday since April 2, and that’s not how bull markets behave.

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

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 April 6th = Downtrend

• ADX Directional Indicators: Downtrend
• Institutional Activity (Price & Volume): Downtrend
• On Balance Volume Indicator: Downtrend

ANALYSIS
The stock market outlook remains in a downtrend after a historic week for U.S. equities.

The S&P500 ( $SPX ) fell 9.1%.  The index sits ~13% below the 50-day moving average and ~12% below the 200-day moving average.  It’s worth nothing the two “gaps” in lasts week’s price action (5600 to 5500 and 5400 to 5300) as potential upside targets IF the market attempts to bounce this week.

SPX Price & Volume Chart for Apr 06 2025

The Average Directional Index ( ADX ) remains bearish. Massive selling last week keeps Institutional Activity showing a downtrend as well.  On-Balance Volume ( OBV ) shifted back to bearish.

S&P Sector Performance for Week 15 of 2025

All sectors were down last week, with Technology ( $XLK ) leading for the second week in a row.  Consumer Staples, Health Care, and Utilities ( $XLP, $XLV, $XLU ) joined all the other sectors with a Bearish bias.

Sector Style Performance for Week 15 of 2025

High Beta ( $SPHB ) was the worst sector style last week.  Low Beta ( $SPLV ) and High Dividend ( $SPHD ) joined the other styles with a Bearish bias.

Asset Class Performance for Week 15 2025

Bonds ( $IEF ) were the best asset last week, while Oil ( $USO ) and US Equities were the worst.  No change in bias.

COMMENTARY
Last week was an extraordinary one for equity markets. Have you heard the saying “nothing good happens after midnight”?  Well, nothing good happens under the 200-day moving average either.

Over the past two day trading days (4/4 – 4/5), the S&P500 fell 10.5%; only the 5th time happened since 1950! Bonds and Gold were the only safe havens, and even then, Gold sold off along with everything else.

Ideally, investors sell when and what they want to sell.  It’s another reason to use a signaling process identify downtrends and adjust holdings.  But there are times when investors are forced to sell when and what they can sell (e.g. margin calls).

Prior to Thursday, selling was orderly ( $VIX lower than expected for the size of the price movement ), meaning that people were selling because they wanted to exit.  But late Thursday and into Friday, we started seeing forced selling (i.e gold).

No one knows what is going to happen this week, but there’s no shortage of opinions flying around on social media. In the midst of uncertainty, everyone scrambles for some kind of narrative, some kind of story, to explain the current situation.  In the end, it’s price that matters, not the narrative.

At the time of this post, Asian equity markets are down significantly ( Japan is down more than 8% ), and U.S. futures are 3% lower.  Don’t try to “catch a falling knife”.  Prices will recover eventually, and tickers on sale today will still be on sale when the bias moves back to bullish.

Q1 earnings season starts this week with big banks likely providing more insight on tariffs and the impact on forward guidance.

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

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 March 30th = Downtrend

• ADX Directional Indicators: Downtrend
• Institutional Activity (Price & Volume): Downtrend
• On Balance Volume Indicator: Neutral

ANALYSIS
The stock market outlook remains in a downtrend as we close out Q1.

The S&P500 ( $SPX ) fell 1.5% last week.  The index is ~5% below the 50-day moving average and ~3% below the 200-day moving average.

SPX Price & Volume Chart for Mar 30 2025

The Average Directional Index ( ADX ) remains bearish. On-Balance Volume ( OBV ) moved back to it’s trendline, so the signal shifts back to neutral.

Institutional investors wouldn’t or couldn’t provide a follow-through day for the currently rally attempt; the 3/24 move didn’t have enough trading volume and prices immediately retreated from resistance.  It’s still possible we get a follow-through day this week, but distribution days between the start of a rally and the follow-through are never a good sign and we had 2 last week.

S&P Sector Performance for Week 14 of 2025

Consumer Staples ( $XLP ) was the only sector to secure a gain last week, while Technology ( $XLK ) led to the downside.  Consumer Staples, Health Care, and Utilities ( $XLP, $XLV, $XLU ) moved to Neutral bias.

Sector Style Performance for Week 14 of 2025

Low beta ( $SPLV ) provided some shelter from last week’s selling, while High Beta sold off hard ( $SPHB ).  Not changes in bias and still a bearish picture overall.

Asset Class Performance for Week 14 2025

Gold ( $GLD ) was the best performing asset last week, while U.S. equities ( $SPY ) were the worst.  No change in bias; defensive assets remain the strongest.

COMMENTARY
Leading off with a a bit of housekeeping: corrected an issue with the performance tables, specifically the “Returns since Bias Shift” for the Bearish designation.  A minor issue, but after review, one that provides a great reminder to avoid deploying capital into bearish sectors, styles, and asset classes!

The latest rally attempt did, in fact, reveal itself to be a counter-trend bounce:

Until we see more shifts to bullish bias by sectors and styles, as well as breakouts by individual growth stocks, consider the recent move as a counter-trend bounce.

2024 Q4 GDP got a slight increase for the final estimate, coming in at +2.4%.  Unfortunately, that means slowing growth, since it’s 0.8% lower than Q4 2023.  Q1 2025 GDP is likely to “disappoint” again, coming in around 1% (for reference, 2024 Q1 was 1.6%).

February PCE showed no movement in the headline data.  Core came in at 2.8%, higher than January’s 2.7%*, which was also adjusted higher from 2.6%.  So inflation remains “sticky”, and that’s prior to any potential impact from new tariffs.

This week, we get job and survey data, in the form of ISM PMI results, JOLTS, and Non-Farm Payrolls. From a volatility perspective, the big event this week comes on Wednesday (April 2), when the current administration is expected to announce an updated trade policy, centered on reciprocal tariffs.  There’s been a lot of mixed messaging leading up to the event, and you know how market participants react to uncertainty…they hedge and /or sell.  And remember those 25% tariffs on Mexican and Canadian imports? April 2 is the expiration date for those as well.

With slowing economic growth, sticky inflation, and the threat of tariffs exacerbating both, don’t be surprised when you hear talk of “stagflation”, or even the “R” word (i.e. recession), hitting the airwaves in April.  But by that time, it’ll be old news, since U.S. equities showed their hand back in February.  Instead, use your time to manage your portfolio, making sure you’ve got minimal exposure to bearish trends, while maximizing allocations to assets, sectors, and styles that are moving to and sustaining a bullish bias.  Currently, that’s investments in precious metals, European equities, or U.S. bonds.

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

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 March 23rd = Downtrend

• ADX Directional Indicators: Downtrend
• Institutional Activity (Price & Volume): Mixed
• On Balance Volume Indicator: Bullish

ANALYSIS
The stock market outlook remains in a downtrend, though the indicators improved and are on the verge of shifting back to an uptrend.

The S&P500 ( $SPX ) rose 0.5% last week.  The index is ~4% below the 50-day moving average and ~1% below the 200-day moving average.

SPX Price & Volume Chart for Mar 23 2025

Some improvement in the technical indicators last week.  First things first, the Average Directional Index ( ADX ) remains bearish.  The potential rally start from 3/14 remains intact, but we’re still waiting for a follow-through day, which puts Institutional activity in mixed territory.  On-Balance Volume ( OBV ) moved back to bullish.

S&P Sector Performance for Week 13 of 2025

Energy ( $XLE ) outperformed other sectors for a second week in a row, one of the few that are bullish bias.  Staples, Materials, and Utilities ( $XLP, $XLB, $XLU ) were tied for worst performance.

Sector Style Performance for Week 13 of 2025

Most sector styles were up last week, with high beta ( $SPHB ) leading and high dividend ( $SPHD ) lagging.  No changes in bias; risk-off styles are the only bullish areas, and even those returns are relatively small.

Asset Class Performance for Week 13 2025

A decent week across asset classes last week, with Oil ( $USO ) leading to the upside. Bitcoin ( $IBIT ) was the worst performer.  No changes in the bias here either.

COMMENTARY
The FOMC chose to keep U.S. overnight interest rates unchanged, as expected. They noted uncertainty around the economic outlook, but still see rates down 0.5% by the end of the year.

This week provides us with the final edition of Q4 GDP figures ( no surprises expected there ), and February PCE.

Despite the improvement in market outlook signals, most of the sectors and styles remain bearish bias, and are overbought after last week.  Ideally, you’ll want to see a) market leadership (e.g. IBD Innovators – $FFTY ) front running equities to the upside, and b) financials and technology support any change in the market outlook (i.e. move to bullish bias), due to their large institutional ownership.

The name of the game this week is hurry up and wait.  Until we see more shifts to bullish bias by sectors and styles, as well as breakouts by individual growth stocks, consider the recent move as a counter-trend bounce.

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

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.