The Safe Investing Blog

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.

Stock Market Outlook entering the Week of March 16th = 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 failed rally attempt.

The S&P500 ( $SPX ) fell 3.1% last week and tested the 200 day moving average.  The index is ~5% below the 50-day moving average and ~2% above the 200-day moving average.

SPX Price & Volume Chart for Mar 16 2025

All three indicators remained bearish.  Another week, another failed rally attempt, as institutions weren’t in a buying mood and used the 3/7 rally attempt as another exit opportunity.  Sticking to the script, the market put in another potential rally start on Friday, although this time the trading volume was low.

S&P Sector Performance for Week 12 of 2025

Energy ( $XLE ) and Utilities ( $XLU ) were the only green sectors last week.  Discretionary ( $XLY ) was the worst sector.  The bias for Communications ( $XLC ), Staples ( $XLP ), and Materials ( $XLB ) moved to bearish, Real Estate ( $XLRE ) moved to Neutral.  Energy ( $XLE ) and Utilities ( $XLU ) moved back to bullish.

Sector Style Performance for Week 12 of 2025

No winners across the sector styles last week; Defensive led to the downside with a drop of 3%.  Large-cap value ( $IWX ) and Defensive ( $POWA ) moved to bearish bias.

Asset Class Performance for Week 12 2025

Gold led to the upside last week, continuing its recent run atop the leaderboard.  Bitcoin and US equities were the worst performers.  Dollar met resistance, shifting back to bearish bias from neutral.

COMMENTARY
Economic data didn’t ring any alarm bells last week.  January JOLTs was up slightly versus December.  February inflation data easing from a year over year perspective.  Headline and core consumer price index ( CPI ) fell 20 basis points.

Producer prices ( PPI ) fell more than CPI, with Headline and Core PPI down 0.5% and 0.4%, respectively, thanks to upward revisions to January data (+0.2%).

This week is likely to continue to trend of higher volatility, with retails sales, housing data, and another FOMC interest rate decision, not to mention any additional tariff talk.

Last weeks price action looks to be a consolidation of the recent sell off, which could turn into a near term bottom.  But volatility is still elevated ( i.e. >20 ), and most sectors and styles are bearish bias, so positive price action has a higher probability of being a counter-trend rally than the start of a new trend.  Either way, the ADX should turn around first, and we’ll need to see confirmation of Friday’s rally attempt sometime after Wednesday this 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 March 9th = Downtrend

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

ANALYSIS
The stock market outlook remained in a downtrend last week after last week’s rally attempt failed. Equities get a second chance this week, thanks to another strong Friday rally.

The S&P500 ( $SPX ) fell 3.1% last week and tested the 200 day moving average.  The index is ~4% below the 50-day moving average and ~1% above the 200-day moving average.

SPX Price & Volume Chart for Mar 09 2025

On-balance volume shifted to bearish last week, reflecting the high volume selling experienced since mid-February.  Institutions weren’t in a buying mood last week either, instead using the 2/28 rally attempt as a exit opportunity.  The market will try again this week, after putting in another strong Friday session.  That said, the ADX shows a strengthening downtrend taking hold as we entered the weekend.

S&P Sector Performance for Week 10 of 2025

Healthcare ( $XLV ) was the only shelter from last week’s sell-off, basically breaking even.  Financials ( $XLF ) were the worst sector.  The bias for Energy ( $XLE ), Financials ( $XLF ), and Industrials ( $XLI ) fell to bearish.   Communications, Materials ( $XLB ), and Utilities are testing their support levels.

Sector Style Performance for Week 10 of 2025

Like Healthcare, the High Dividend ( $SPHD ) sector style was the only winner last week. Mega-cap growth ( $OEF ), Momentum and Quality styles fell to bearish bias, while Large-cap value ( $IWX ) is testing support at a neutral bias.

Asset Class Performance for Week 10 2025

A bit of a comeback for Bitcoin; probably a response to all the crypto-related announcements out of Washington D.C. last week.  Otherwise, Gold was the other safety play, while Oil led to the downside.  The dollar also fell to bearish bias, thanks to an unusually large decline during the week.

COMMENTARY
First things first: the smart money is selling the rips, not buying the dips, which means U.S. equities are in sell mode. Whether it’s initial or reciprocal tariffs, government upheaval, or geopolitical turmoil, the world is an increasingly uncertain place at this moment in time. And financial markets do not react well to uncertainty, so you’re seeing risk-off trades.

Rising foreign currencies have pressured the U.S. Dollar in recent weeks, unwinding most of the post-election rally. Of greater interest is the bond market, specifically Germany’s: yields on government bonds have spiked after they announced changes to their “debt brake” and an historic boost in spending. The increase in bond yields comes despite the European Central Bank cutting interest rates for the fifth time in a row and lowering its growth forecasts for the Eurozone; likely an attempt to mitigate the impact of tariffs. These developments impact the profitability of various carry trades, changing capital flows and volatility throughout the global financial system.

January macroeconomic data ( ISM PMI Surveys ) showed slightly lower manufacturing activity and slightly higher service-related activity. February non-farm payrolls showed a month over month increased, but fell short of forecasts. At a speech in Chicago, Federal Reserve Chairman Powell stated that “the US economy continues to be in a good place,” and while they aren’t focused on the uncertainty caused by tariffs, they are waiting for more data to determine if and when interest rate adjustments are needed. So there’s no “Fed put” at the moment.

If you’re looking hold a position longer than a day or two, you want to buy the best of the best when you have the highest odds of success. Now is the time to prepare your watch lists for the next buying opportunity ( big up days with higher than average trading volumes, $VIX < 20, bullish bias, etc. ). There are only a few places with a bullish bias ( see above ), and their largely defensive in nature.

This week we get January JOLTs, February CPI & PPI, and March 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.