Search

The past two weeks have been 2021 in a nutshell. Two weeks ago, stocks came into trading having bounced nicely, but instead of following through, the indexes and leaders cascaded. Then, this week, when things looked close to going over the falls, we’ve seen an excellent rebound, with the major indexes recouping 45%-ish of their losses in just a couple of days.

It’s been a relatively quiet holiday-shortened week, with the indexes and many individual stocks not making many moves. (A few groups, like energies, financials and even REITs made decent moves, but that was about it.) It’s possible this morning’s jobs report could change that, but all in all we’ll chalk it up as a neutral week—which, coming after three constructive weeks, is fine by us.

Capital market, economic, geo-political and societal changes are happening quickly.

It’s looking like another constructive week for stocks, as the major indexes are trading in the black, led by the strong small-cap area (up nearly 3%). Thanks mostly to last week’s powerful rebound, the intermediate-term trend of the indexes remains firmly up.

Today’s note includes the podcast.

This was a quiet week, with no earnings reports or ratings changes.

You probably couldn’t have scripted a better response by the market and leading stocks to last week’s wild action—the major indexes (a couple of which nosed below their 50-day lines last Friday) have moved straight up this week, with some approaching new-high ground, and many leaders have followed suit. Indeed, in our issue this week, we said the next few days should be key, and we think they have been.

Today’s note includes earnings updates, ratings changes and the podcast.

It hasn’t been all bad over the past four or five weeks of course, but we did see an accumulation of yellow flags, including some big-volume selling, a thinning out of the advance, and the major indexes moving out of trend on the upside.

The evidence for the overall market has continued to worsen this week—all the major indexes have sliced below their 50-day lines, which has turned the intermediate-term trend down for the first time since April.

From a top-down perspective, the week has been fine—the S&P 500 and Nasdaq are down less than 1% on the week as of this morning, while broader indexes (small and mid-caps) are up decently. All in all, that keeps the intermediate-term trend pointed nicely higher, with most indexes at least a few percent above their 50-day lines.

This week’s update includes our comments on earnings from Baker Hughes (BKR) and Mattel (MAT) as well as commentary on several stocks.

It’s been another good week for the major indexes—the big-cap S&P 500 and Nasdaq are again leading the way (up 2.5% to 3% coming into today), but even the broader indexes like small and mid-caps are up 1.5% or so.

It’s been an up-and-down week for the market, with a booming advance on Monday giving way to a three-day pullback, and this morning has been a nothing burger so far. The net result is mostly modest gains across the board.

Stocks moved lower again this week, though we will say the buyers have at least put up a little bit of a fight, with both Wednesday and (so far) this morning showing some buying.

The major indexes have bounced a bit this week, though compared to the prior two declines, it’s not much to brag about—as of this morning, the big-cap indexes are up a bit less than 1%, though the broader indexes (small- and mid-caps) are up around 2%.

The big news of the week involved the wild, hectic action in many highly shorted stocks, which served to crush some hedge funds, which in turn likely caused some forced selling of their liquid winners—damaging many leading stocks. Interestingly, from a major index point of view, the week looks normal, with 1.5% to 2.5%-type losses as of this morning.

From the start of this intermediate-term advance back in early November through most of January, there weren’t many bad things you could say—yes, sentiment was bubbly, and there was the occasional horrid day or severe bout of rotation, but the major indexes and most portfolios enjoyed a relatively smooth upmove.

Today’s note includes ratings changes, the podcast and the Catalyst Report. We publish the Catalyst Report on the Friday after each monthly issue of the Cabot Turnaround Letter.

We do think many of this week’s pullbacks could develop into nice early-stage entries, though we’d prefer some of these names settle down for a few days.