Weekly Market Recap (Mar 17-21): Markets Bounce After Four-Week Slide – But We're Not Out of the Woods Yet
Everything you need to know about last week's markets performance and what to expect next.
Dear readers,
Welcome back to My Weekly Stock, where in-depth market analysis meets proven momentum-based trading strategies. My mission? To help you win in the markets with unbiased, data-driven insights you can act on.
Friday means it's time to review the week in the markets. Each week, I dedicate hours to curating this market recap, preparing insightful analysis with clear visuals and a structured layout—making it easy for you to find exactly what you need, week after week. And because it's easy to get swayed by personal bias, I like to let the data do most of the talking.
If you want the full experience, consider upgrading your subscription. As a paid subscriber, you'll gain access to my 3 winning portfolios—and so much more: a clear investing framework, my momentum-based analysis, and live portfolio updates
Plus, as a token of my appreciation, your first month is FREE. If you're ready to give it a try—or simply want to support my work—this is your chance!
Let's dive in!
SUMMARY
Here are this week's highlights and what to look out for next:
1. The markets were positive this week, with the S&P 500 up 0.5%, the Nasdaq 0.2%, and the Dow Jones 1.2%. Energy (+3.1%) and Financials (+1.9%) were the best-performing sectors.
2. The S&P 500's long-term trend is mixed, and the short-term momentum is weak. 5,700 is the next resistance, while 5,500 is support.
3. The Q4 earnings season is almost over and 496 companies from the S&P 500 index have released their quarterly results, with 74% beating estimates. Earnings are expected to be up 17% in Q4 2024 and 11% in 2025.
4. Market sentiment is at the "Extreme Fear" level (23) as measured by CNN’s Fear & Greed indicator, while VIX is at a medium value of 19.
5. Earnings reports from Lululemon and Dollar Tree and the latest PCE data are scheduled for next week.
My take:
After four straight weeks of losses, the market finally closed in the green, but it's too early to call it a victory. On the bright side, we didn't retest last week's lows, but we failed at 5,700 and remained below the 21-day EMA.
I'll watch the same key levels closely for the week ahead: 5,500 as the previous week's low and 5,700 as the resistance to clear for any real momentum shift. So, while this short-term bounce is still alive, I remain cautious. And until we reclaim the 21-day EMA, the risk of further downside remains elevated.
PERFORMANCE RECAP
1. S&P 500 Sector Performance
This week, 8 out of the 11 S&P 500 sectors posted gains. Energy led the market with a 3.1% increase, while Consumer Defensive was the laggard, dropping 0.2%.
Year-to-date, 9 sectors have achieved positive performance. Energy is the top-performing sector with a 8 % gain, while Consumer Cyclical lags behind, with a 12 % loss.
2. S&P 500 Top & Worst Performers
Over the last five trading days, 59% of the stocks in the S&P 500 index rose in value.
Top Performers:
$BA (Boeing Co): 10.1%
$LUV (Southwest Airlines Co): 9.8%
$DPZ (Dominos Pizza Inc): 8.4%
$DRI (Darden Restaurants, Inc): 7.5%
$MOS (Mosaic Company): 7.5%
Worst Performers:
$MRNA (Moderna Inc): -5.7%
$LMT (Lockheed Martin Corp): -5.7%
$IT (Gartner, Inc): -5.9%
$MU (Micron Technology Inc): -6%
$NUE (Nucor Corp): -7.6%
In addition, 16 stocks within the S&P 500 reached a new 52-week high, while 5 stocks set new lows. The majority of this week’s highs came from the Financials sector.
Notable Highs:
$RTX (RTX Corp)
$PGR (Progressive Corp)
$ICE (Intercontinental Exchange Inc)
$CME (CME Group Inc)
$DUK (Duke Energy Corp)
Notable Lows:
$ODFL (Old Dominion Freight Line, Inc)
$DECK (Deckers Outdoor Corp)
$IPG (Interpublic Group Of Cos., Inc)
$JBHT (J.B. Hunt Transport Services, Inc)
$CMG (Chipotle Mexican Grill)
MARKET MOMENTUM
1. Momentum Review
To evaluate the market's current health, I examine 4 key elements: performance, breadth, trends, and key levels. Healthy bull markets typically feature indices setting new highs, broad market participation, and ascending trend lines.
Performance (WEAK 🔴): evaluating recent market performance to gauge the momentum’s strength. Ideally i want to see returns accelerating short-term and index trading less than 5% from its 1-year high
1-month performance: -7.6% 🔴
3-month performance: -6.7% 🔴
vs. 1-year high: -8.0% 🟡
Breadth (WEAK 🔴): assessing market participation to understand the health of the trend. Extreme levels (above 80% or below 20%) may indicate overextended trends.
% of stocks above 200-day moving average: 41% (up from 39% last week) 🔴
% of stocks above 20-day moving average: 33% (up from 27% last week) 🔴
Trends: analyzing trend strength across multiple timeframes using exponential moving averages, scored on a scale of 1 to 5. A score of 3 or above suggests solid trends and supports holding a position.
Weekly chart: MIXED ⭐️⭐️ (stable vs last week)
Daily chart: WEAK ⭐️(improving vs last week)
4-hour chart: WEAK ⭐️ (improving vs last week)
Key levels: identifying critical price zones to confirm the current trend or signal a potential reversal.
Support:
$5,190 (-8.4%)
$5,410 (-4.%)
$5,500 (-3.0%)
Resistance:
$5,700 (+0.6%)
$5,850 (+3.2%)
$6,000 (+5.9%)
Enjoying the analysis so far? There’s so much more in the paid version, where I cover 70+ stocks and ETFs every month. Subscribe now to learn how I connect strategy to insights and, ultimately, portfolio decisions.
2. Post of the Week
This week's momentum analysis is about Asset Class ETFs' trends. Using a combination of performance metrics and technical indicators, I've developed a proprietary algorithm to rank these various segments of the market and identify potential outperformers. Based on this approach, I've identified the Gold as having the best relative momentum currently.
EARNINGS & ECONOMIC REPORTS RECAP
1. Earnings Outlook
Q4 Earnings: S&P 500 earnings are expected to grow by 17%, rising to 21% when excluding the energy sector.
2025 Full-Year Outlook: Earnings are expected to increase by 11%, above the 10-year average growth of 9%.
Analyst Revisions: Over the past month, 39% of all earnings revisions by analysts have been upward adjustments to their outlook.
Valuation: The forward 4-quarter P/E ratio stands at 21.0, above the 5-year and 10-year historical averages.
2. Earnings Season Recap
Out of 496 S&P 500 companies that have reported fourth-quarter earnings, 74% exceeded EPS expectations. It is slightly below with the four-quarter average of 78% but above the historical average of 67%.
Below are some notable companies that reported earnings last week. I’ve highlighted their EPS and revenue performance vs estimate, as well as their stock return this week.
One highlight of the week was Micron, which topped Revenues and EPS estimates. However, the stock still lost 6% for the week.
3. Economic Reports
Here are this week’s key economic reports:
Retail Sales Disappoint: February’s Retail Sales report came in softer than expected at 0.2% vs. 0.6% forecast, suggesting consumer spending remains under pressure.
Fed Holds Rates Steady: As widely expected, the FOMC left rates unchanged at 4.50%. However, the central bank signaled it is ready to act should economic conditions deteriorate further—an assurance that was welcomed by markets.
MARKET SENTIMENT
Measures of investor sentiment can be helpful as they provide insight into the views and opinions of professional or individual investors. While not definitive predictors of market direction, these measures can serve as a valuable complement to other indicators and analysis tools, helping to paint a more comprehensive picture of the market's current state.
1. AAII Sentiment Survey (Individual Investors)
The American Association of Individual Investors (AAII) conducts a weekly survey to gauge members' expectations for the stock market over the next six months. Results are published every Wednesday.
In the latest survey, 22% of respondents had a bullish outlook, up from 19% the previous week.
2. BofA Bull & Bear Indicator (Institutional Investors)
The Bank of America Bull-Bear Indicator measures investor sentiment based on fund managers' and institutional investors' views. Scores range from 0 (extremely bearish) to 10 (extremely bullish).
The most recent reading was 5.2, a neutral sentiment.
3. CNN Fear & Greed Index (Technical)
This daily measure analyzes seven indicators to assess how emotions drive market decisions. Scores range from Extreme Fear to Extreme Greed.
The index closed at 23 (Extreme Fear), up from 21 last Friday.
THE WEEK AHEAD
1. Economic Calendar
Here are the key reports for the upcoming week:
PCE Data: The Core PCE Price Index—the Fed’s preferred inflation measure—will be released on Friday. Markets will watch for any signs of cooling inflation after last month’s 2.6% YoY reading.
GDP Update: On Thursday, the latest Q4 GDP revision will provide further insights into the strength of the U.S. economy.
2. Earnings Calendar
Earnings season continues next week, and 5 companies from the S&P 500, including Dollar Tree and Lululemon, are expected to release their quarterly results.
Below are notable stocks reporting earnings next week, along with several key indicators I like to monitor:
Stock Indicators:
3-Month Performance: Assessing recent stock trends.
RSI (Relative Strength Index): A reading above 70 suggests overbought conditions, while below 30 indicates oversold.
P/E Ratio: A value below 25 often points to a "cheap" valuation or low growth expectations.
Stock Price Reactions to Earnings:
1-Day Stock Return on Earnings: How the stock performs on its earnings release day.
Implied Volatility: The options market's forecast for the expected 1-day stock move after earnings.
3. Stock Analysis of the Week
Every week, I share my analysis of 1 stock that has reported earnings in recent weeks, focusing on implications for long-term investors. This week, I prepared an analysis of Adobe ($ADBE).
👨💻 My View: PASS
Adobe ($ADBE) has been under pressure for months, consistently making lower highs and lower lows. The latest post-earnings drop only reinforces the bearish setup.
We’re approaching oversold conditions, but catching a falling knife here is risky. I wouldn’t trust any bounce until we reclaim the 30-week EMA, a critical long-term trend line.
I recently exited my position and will stay on the sidelines until the momentum turns positive.
Check out the post for more details about $ADBE performance, trend and key levels.
CONCLUSION
Thank you for reading my Weekly Market Recap, which, I hope, got you ready for the week ahead.
If you want to take your investing journey to the next level, consider upgrading to a paid subscription. Subscribe now and learn more about my holistic, end-to-end momentum approach to investing.
Your first month is free, so this is the perfect opportunity to explore the full value of My Weekly Stock at no risk!
Thanks again, and I look forward to sharing my market recap with you next week.
Happy investing!
My Weekly Stock
DISCLAIMER
The information provided in this newsletter is for informational purposes only and should not be taken as financial advice. Any investments or decisions made based on the information provided in this newsletter are the reader's sole responsibility. We recommend that readers conduct their own research and consult a qualified financial professional before making investment decisions. The author does not assume any responsibility for any losses or damages arising from using the information provided in this newsletter.