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Due to travel, I will not be releasing a weekly outlook at this time. Instead, I'll hand things over to Keith.

Every week, we review the big picture of the market's technical condition as seen through the lens of our data charts. The bullets below provide a quick summary organized by conditions we see as being risk-on, risk-off, or neutral.

Summary

While Friday’s action was encouraging for a potential market turnaround, we need to see further confirmation, like the Nasdaq and S&P 500 regaining their 200-day moving averages.

Value stocks continue to outperform and seem to be poised to lead the market up or outperform on a further decline, although Semiconductors could also signal a reversal in the beaten-down tech sector and a return to risk-on sentiment.

Risk-On

• Markets hit new lows on Thursday and were oversold on both a price and real motion basis. Markets were also set up for mean reversion trades across the four key indexes. We witnessed a strong bounce on Friday. We need further confirmation that this wasn’t just a short-term relief rally.
• The number of stocks above their key moving averages hit oversold levels, and many stocks are already starting to reverse, particularly on the 20-day moving average.
• Value stocks improved this week.
• BTC effectively held onto its 200-day moving average, going back several years. It tested that average and recovered nicely.
• Seasonal trends are confirming a potential bounce in the latter half of March, aligning with many other mean-reversion signals, and this could indicate a particularly strong bounce.

Neutral

• Risk-off sectors like gold miners and utilities were up on the week. However, semiconductors were also up, which could translate to a more significant tech rally if the trend continues.
• Volume patterns are still very weak, though they marginally improved from recent levels.
• Even though the McClellan Oscilator is still in negative territory, it has leveled off and bounced from oversold levels.
• The new high/new low ratio on the Nasdaq is potentially basing out at low levels, which could support a mean reversion bounce.
• The SPY charts have demonstrated neutral readings on a short-to-midterm basis
• As we noted last week, volatility measurements hit overbought levels and are in the process of reverting from key resistance levels in both cash and the futures-based ETF.
• Foreign equities continued to outperform U.S. equities by some of the widest margins in quite some time.
• Semiconductors are now slightly outperforming the S&P on a short-term basis, which could be a lead indicator of whether we are going to enter a more risk-on environment.

Risk-Off

• Latin American equities were strong this week. This price action was likely related to commodities, especially the metals, such as silver, gold, and copper.
• The Nasdaq and Russell 2000 (IWM) continued to give negative readings across the board.
• Risk gauges have remained fully risk-off despite Friday’s bounce.
• Gold bucked the trend and put in new all-time highs, which is consistent in a risk-off environment as we have pointed out in the past. Equities can go up against this trend, but one usually accedes to the other.
• The dollar remains under pressure and was marginally down on the week. Considering the importance of the dollar in global finance and declining equities, this is a negative.

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