March 27, 2026

Global markets struggled with higher oil prices this week as Iran kept the Strait of Hormuz closed, further constraining global supply. US equities also battled higher yields on inflation fears as the rate on the 10-year Treasury closed at 4.4436%, a 7-month high, while the two-year T-Bill landed at 3.912%. The major averages tracked headlines on the Iran war during the week with a spike on Monday after President Trump delayed strikes on Iranian infrastructure. Low demand at Tuesday's Treasury auction pushed yields higher and equities lower with software stocks slammed once again on AI disruption. The iShares Tech-Software ETF (IGV) tumbled -4.35% on the day. Investors were cautiously optimistic after the US submitted a 15-point peace plan on Wednesday that Iran rejected, but showed talks were ongoing. Oil prices jumped again on Thursday and Friday on more saber-rattling and the different indexes traded sharply lower as big cap technology and momentum stocks led a selloff that landed the Dow Jones, S&P 500 and NASDAQ at their lowest levels since August 2025. The major averages rode the headlines around the Iran war lower for a fifth consecutive week, the longest losing streak for the S&P 500 since 2022, as a de-escalation of the conflict seemed elusive. Next week investors will get a fresh look at the jobs situation with the ADP Employment Report out on Wednesday and the BLS jobs report due on Friday, while keeping an eye on new war headlines that will dictate market direction.

For the period, the DJIA lost 410.83 points (-0.9%) and settled at 45166.64. The S&P 500 slipped 137.63 points (-2.1%) and closed at 6368.85. The NASDAQ fell 699.25 points (-3.2%) finishing at 20,948.36. The small cap Russell 2000 added 11.25 points (+0.5%) and settled at 2449.70.

Market Outlook: The technical condition of the market continued to deteriorate this week as the major averages extended their selloff for a fifth consecutive week. The DJIA, S&P 500 and NASDAQ all closed below their respective 200-day MA and remain in clear pattens of lower highs and lower lows with each bounce stalling below prior highs. The major averages also closed below their prior week's intraday low, a negative connotation. Trend indicators, including the MACD and a falling 50-day MA, confirm the bearish downtrend and Momentum, as measured by the 14-day RSI, continues to slow and is negative. The S&P 500 and NASDAQ also finished the week slightly oversold with stochastics below 20. There were some positive signs however, as the DJ Transportation Index and small cap Russell 2000 were able to carve out a higher close. The Philadelphia Semiconductor Index (SOX), which has outperformed during the last few weeks, finally broke support at its 100-day MA on Friday snapping its two-week win streak. While the selloff has been orderly so far, this week saw selling in overweighted big cap technology, the Mag 7 and momentum stocks which pulled the major averages sharply lower on Thursday and Friday. More selling in those securities could start another leg lower. The VIX continues to grind higher as traders grow more concerned with further losses. Finally, the percentage of stocks trading above their 200-day MA has fallen to 42% and also confirms a bearish bias and oversold market. That's the fewest percentage since June 2025.

Six of the 11 sectors finished the week trading below their respective 200-day MA with Communication Services (XLC), Consumer Discretionary (XLY), Financial (XLF) and Technology (XLK) falling to levels from last summer. Despite the steep selloff, four of the 11 sectors managed to close in the plus column on the week. The Industrial (XLI) sector broke support at its 100-day MA on Friday, while Materials (XLB) held that support level. Only Utilities (XLU) and Energy (XLE) remain in an uptrend with Energy at a new record high.

A chart of these indicators can be found by going to the Market Edge Home page and clicking on Market Recap, which is on the right-hand side of the page just below the Second Opinion Status numbers.

Cyclical Trend Index (CTI): The underlying premise of the CTI is that the market, as measured by the Dow Jones Industrial Average (DJIA), tends to move in cycles that often resemble sine waves. There are five identifiable cycles, each with different time durations at work in the market at all times.

Currently, the CTI is Negative at -6, unchanged from the previous week. Cycles C and D are bullish, while Cycles A, B and E are bearish. The negative CTI is close to a reset for cycles A and B that would change the the CTI to Bullish, but the DJIA will need to hold above 45063 to consider a reset over the next week.

Momentum Index (MI): The markets momentum is measured by comparing the strength or weakness of several broad market indexes to the DJIA. Readings of -4 and lower are regarded as bearish since it is an indication that a majority of the broader based market indexes are weaker than the DJIA on a percentage basis. Conversely, readings of +4 or higher are regarded as bullish.

The Momentum Index is Neutral at +0, up two notches from the previous week. Breadth was mixed at the NYSE as the Advance/Decline line added 48 units while the number of new 52-week lows exceeded the number of new highs on five sessions. Breadth was negative at the NASDAQ as the A/D line dropped 1703 units while the number of new lows out did the new highs on each day. Finally, the percentage of stocks above their 50-day moving average eased to 21.4% vs. 22.6% the previous week, while those above their 200-day moving average fell to 42.3% vs. 47.0% prior. Readings above 70.0% denote an overbought condition, while below 20% is bullish.

Underlying market breadth is mostly negative with the NYSE and NASDAQ Advance/Decline Lines, leading indicators of market direction, finishing mixed. The A/D lines generally will top out a few weeks before a market top and the NYSE A/D line hit its high the last week of February, while the NASDAQ A/D line topped out in November shortly after the index notched a record high. The NASDAQ recorded more new 52-lows than highs for a fourth consecutive week with the number of new lows expanding daily. The NASDAQ recorded 550 new lows on Friday, the most since the first week of February. The NYSE new lows have also expanded and outdid the new lows for a third straight week.

Sentiment Index (SI): Measuring the market's Bullish or Bearish sentiment is important when attempting to determine the market's future direction. Market Edge tracks thirteen technical indicators listed below that measure excessive bullish or bearish sentiment conditions prevalent in the market. The Sentiment Index is Neutral at +3, up two notches from the previous week.

Investor sentiment shows both retail and professional investors becoming more bearish. The American Association of Individual Investors (AAII) shows retail investors are unusually bearish at 49.8% and above the historical average of 31.0% for a seventh consecutive week. The National Association of Active Investment Managers (NAAIM) Exposure Index ticked increased to 68.5% following the lowest exposure to equities for money managers since the first week of May 2025. The Percentage of Bullish Investment Advisors fell to a bullish 39.3%, while the Percentage of Bearish Investment Advisors rose to 25.0%, the most since June 2025. The numbers reflect bearish sentiment has increased but doesn't signal that the stock market is attempting to bottom. When looking at sentiment indicators it's best to wait until they reach extreme levels of bearishness or bullishness when they work well as contrarian indicators.

Market Posture: Based on the status of the Market Edge, market timing models, the 'Market Posture' is Bearish as of the week ending 02/27/2026 (DJIA - 48977.92). For a closer look at the technical indicators and studies that make up the market timing models, check out the tables located below.

Industry Group Rankings: What's Hot (16) - What's Not (14): The following are the strongest and weakest Industry Groups for the period ending 3/26/26. Strongest: Agricultural, Integrated Oil & Gas, Energy and Telecommunications. Weakest: Paper & Forest Products, Technology Services, Building Materials and Financial Services. To review all the Industry Group rankings in the Market Edge universe, click on the Industry Group tab.

ETF Center: The top performing ETF categories for the week ending 3/26/26 were: Sector-Energy (+3.69%), Value-Small Cap (+1.09%), Value-Mid Cap (+0.65%) and Shorts (+0.64%). The weakest categories were: Commodity-Precious Metals (-6.42%), Sector-Internet (-4.40%), Specialty Technology (-3.72%), Growth-Large Cap (-3.08%) and Sector-Telecom (-3.03%). To review all the ETF categories in the Market Edge universe, click on the ETF Center tab.

By David L. Blake, CMT