The Safe Investing Blog

Stock Market Outlook entering the Week of May 25th = Uptrend

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

ANALYSIS
The stock market outlook stays in an uptrend, as equities retreated to the 200-day moving average.

The S&P500 ( $SPX ) fell 2.6% last week.  The index sits ~4% above the 50-day moving average and ~1% above the 200-day moving average.

SPX Price & Volume Chart for May 25 2025

All three technical indicators remain bullish. The Direction Indicator ( ADX ) could flip to bearish if price decides to head lower and fill the May 12 gap.

S&P Sector Performance for Week 22 of 2025

Consumer Staples ( $XLP )  held up the best last week, while Energy ( $XLE ) was the worst performer and fell back down to bearish bias.  Real estate ( $XLRE )  slid to neutral on the rise in treasury yields.

Sector Style Performance for Week 22 of 2025

Low Beta ( $SPLV ) was the best style last week, while High Beta ( $SPLV ) was the worst.  High Dividend ( $SPHD ) fell to Bearish bias as well, hit by weak equity performance and interest rates.

Asset Class Performance for Week 22 2025

Gold ( $GLD ) clawed back some gains last week, followed closely by Bitcoin ( $IBIT ),  while equities led to the downside ( $SPY ) was the worst performer.  No bias changes to report.

COMMENTARY
Equity indexes gave back some of their recent gains last week and tested support at the 50-day moving average.  Headline volatility remains a risk, with markets hyper-fixated on tariff news.

On Thursday, the U.S. House of Representatives passed the “Big, Beautiful” tax bill, which is front loaded with tax cuts and back loaded with spending reductions. The Congressional Budget Office estimates that the bill would add ~$3 trillion to the deficit over the next ten years, but that’s also front loaded.

While the tax cuts and new spending are likely to have a stimulative effect in the short term, the bond market responded by sending the 10-year yield above 4.5% and the 30-year above 5%. Bond markets are paying attention to government debt and related costs. The interest paid by the U.S. government is already approaching historic levels, and financing this additional debt at higher rates will push the interest paid even higher, thereby putting more upward pressure on treasury yields.

Looking ahead, markets are closed tomorrow for Memorial Day.  Data-wise, we get the latest Durable Goods Orders on Tuesday, FOMC minutes Wednesday, a revised GDP figure Thursday, and PCE on Friday.

Trading volume was below average last week, which should’ve created some decent entry points for long set-ups.  Look for tickers with a bullish bias that break out of proper set-ups when trading resumes.

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 May 18th = Uptrend

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

ANALYSIS
The stock market outlook stays in an uptrend, as equities rallied out of a short consolidation.

The S&P500 ( $SPX ) gained 5.3% last week.  The index sits ~7% above the 50-day moving average and ~3% above the 200-day moving average, roughly the same position as last Sunday.

SPX Price & Volume Chart for May 18 2025

All three technical indicators are bullish. The Direction Indicator ( ADX ) flipped on the gap higher Monday.

S&P Sector Performance for Week 21 of 2025

Technology ( $XLK ) led the way last week, up an amazing 8%.  Healthcare ( $XLV ) was the worst sector again.  Consumer Staples ( $XLP ) and Energy ( $XLE ) jumped up to bullish, leaving Healthcare ( $XLV ) as the lone bearish sector

Sector Style Performance for Week 21 of 2025

High Beta ( $SPHB ) was the best style again last week, and is up 14% since turning bullish. The lowest performer was Low Beta ( $SPLV ) with a 1.5% gain.  Mega-cap Growth, Small and Mid-cap Value, Quality and high Dividend ( $OEF, $IWN, $IJJ, $QUAL, $SPHD ) all improved to bullish bias.

Asset Class Performance for Week 21 2025

U.S. Equities ( $SPY ) led assets higher.  Gold ( $GLD ) was the worst performer.  In terms of bias, U.S. bonds continue to weaken on higher interest rates, pushing $IEF down into bearish bias.

COMMENTARY
Equity indexes gapped higher on the open Monday, in response to the U.S. and China trade deal details, and closed higher every session.  The only downside is that stocks are back in overbought territory!

Consumer Price data shows headline inflation fell in April, while core remained flat; price increases from tariffs haven’t made their way through supply chains yet.  On top of those data points, both measures had their March figures revised lower as well.

As far as producers were concerned ( PPI ) , headline and core fell in April.  But, as expected, March data was revised significantly higher ( +0.7% for both headline and core ).  I’d expect the impact of tariffs to start showing up in May and June readings, but only slightly due to the pauses put in place.

After market’s closed on Friday, Moody’s downgraded the United States credit rating, from Aaa to Aa1, citing growing government debt. There was a lot of ink/electrons spilled over the weekend on the subject, but the decision is inline with earlier decisions by the 2 other rating agencies: Standard & Poor’s downgraded the U.S. in August 2011, and Fitch in August 2023. All 3 still give the U.S. their 2nd highest rating. In terms of a market response, the initial reaction probably sends rates higher and equities/bonds lower in the pre-market session.

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 May 11th = Uptrend

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

ANALYSIS
The stock market outlook stays in an uptrend, as equities took a breather and consolidated gains from the recent rally.

The S&P500 ( $SPX ) fell 0.5% last week.  The index sits ~2% above the 50-day moving average and ~2% below the 200-day moving average, roughly the same position as last Sunday.

SPX Price & Volume Chart for May 11 2025

Institutional activity continues to show an uptrend; below average trading volume remains a concern, but at least there haven’t been any distribution days.  On-Balance volume ( OBV ) also shows an bullish action.  The Direction Indicator ( ADX ) is still stuck in neutral.

S&P Sector Performance for Week 20 of 2025

Industrials ( $XLI ) led the way again last week, rising 1%.  They’ve been the strongest sector during the recent run-up.  Healthcare ( $XLV ) was the worst sector, dropping more than 4%.  Consumer Staples shifted back down to neutral bias.

Sector Style Performance for Week 20 of 2025

High Beta stocks ( $SPHB ) were the best style last week, while several sectors tied for worst performer, including Mega-cap growth, Quality, High Dividend, and Defensive ( $OEF, $QUAL, $SPHD, $POWA ).  Small and Mid-cap Value ( $IWN, $IJJ ) improved to neutral trend; Mega-cap Growth and Quality ( $OEF, $QUAL ) fell back to neutral.

Asset Class Performance for Week 20 2025

Bitcoin ( $IBIT ) led assets higher.  U.S. equities and bonds ( $SPY, $IEF ) were the worst performers.  No change in bias as we enter the week.

COMMENTARY
Equities cooled off last week and managed to find support at the 50-day moving average; a welcome sight after the recent run-up.  They’re not oversold, but aren’t overbought either, resting in between several support and resistance markers.  Remember, look for tickers with a bullish bias that are breaking out on higher trading volumes.

The U.K. and U.S. announced their first trade since the so-called “Liberation Day” on April 2.  While the actual “deal” won’t provide a huge impact economically, it did provide equity markets with a welcome signal that trade talks are progressing.

The U.S. and China also announced initial discussions in Switzerland, with progress made over the weekend and details set to hit the wire on Monday.

The FOMC decided to keep rates unchanged, dealing a blow to those hoping for rate cuts to stimulate a rally in equity markets.  I mean the economy.

This week, we get the latest inflation data ( CPI & PPI ), as well as retails sales, housing starts and 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.

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 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.
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 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.