WWM Commentary

We had a nice Thursday session, so as we end the week, here’s a few key points to consider:  First, the S&P 500 Index is overbought.  That just tells me to be alert to high-volume sell-offs and consider stop losses.  Second, the percentage of S&P 500 stocks trading above their 50-day moving averages is back to negative.  That also tells me to be mindful of pullbacks.  Finally, my Macro Indicator (see below) has shown some minimal weakness.  However, unless it moves negative, I recommend keeping offensive strategies as is.

Four months into 2026 and the S&P 500 Index is up about 5.1% for the year.  As a reminder, I stated the following in my 2026 Outlook published on 12.31.25:  “In my view, the S&P 500 Index, currently trading near 6,900, has the potential to generate a high single-digit to low double-digit total return from January 1 through December 31, 2026.  Such an outcome would represent a deceleration from the outsized performance of 2025, but would remain consistent with historical patterns in mature bull markets.”  I’m sticking with that opinion for now, but that doesn’t mean there aren’t justifiable risk/return setups to consider.  Furthermore, dividends are playing an important role this year.  So, if you’d like to discuss those two topics in greater detail, please let me know and I will be happy to set aside a time to visit.   

I hope you all have a great weekend and let me know if you have any questions.                  

FYI:  The Staples sector is flat since about the beginning of February and its landed in the negative Sector Relative Strength column for the last few weeks.  I’m starting to see some life there, so if you’re looking to place cash into the stock market, perhaps this is something we should discuss.