March 6, 2026

Investors tried to shake off the weekend bombings of Iran to start the week with bulls buying almost every dip, but the different indexes finally joined global markets in trading sharply lower as the week ended. Big cap technology and defense stocks attracted buyers on Monday as investors shifted toward safer assets, but a tick higher in yields weighed on housing related stocks. A Tuesday morning 'washout' sent the Dow Jones down 1200-points amid escalating Iran tensions, but traders stepped in to buy the dip and cut the losses in half before noon. Global markets also tumbled with the Emerging Markets ETF (EEM) dropping -5.01%. Investors sold stocks across the board with every sector except one finishing in the red. Better than expected economic data on Wednesday helped stabilize equities as the ISM Services Index jumped to a three-year high. Eight of the 11 sectors saw buying with the Mag 7, big cap technology and semiconductors outperforming. As the Iran war spread to neighboring countries midweek the DJIA dropped 1100-points at the open on Thursday. Dip buyers brought the major averages off their lows in the afternoon with software stocks leading the rebound. After bottoming out in late February on AI-disruption concerns, the iShares Tech-Software ETF (IGV) has rallied +14.5%. The major averages saw a gap down opening on Friday on a big miss in jobs data and a spike in crude oil prices and stayed down. The February BLS report showed a loss of -92k payrolls vs. expectations of +50k added. Crude oil closed at $90.42 a barrel, up more than +36% for the period, and the first print above $90 since October 2023. Higher fuel prices hit transportation stocks hard leaving the DJ Transportation Index down -6.2%. Airlines were hit with a double whammy of higher fuel costs and thousands of canceled flights sending the Global Jets ETF (JETS) down more than -10%. While oil related stocks surged leaving the Energy (XLE) sector up on the week, every other market group closed lower with Materials (XLB) losing -6.6% and Consumer Staples (XLP), Healthcare (XLV) and Industrial (XLI) down more than -4%. The volatile period left the major averages down for a third week over the last four. Despite steep losses in the DJIA, however, a shift back into big cap technology and semiconductor stocks kept the NASDAQ positive until Friday with just a modest loss. Expect high volatility to continue next week as global markets will trade off daily headlines concerning the Iran war, while keeping a keen eye on rising oil prices that threaten to weigh on global economies and keep markets moving lower.

For the period, the DJIA lost 1476.37 points (-3.0%) and settled at 47501.55. The S&P 500 slipped 138.86 points (-2.0%) and closed at 6740.02. The NASDAQ fell 280.53 points (-1.2%) finishing at 22,387.68. The small cap Russell 2000 dropped 107.06 points (-4.1%) and settled at 2525.30.

Market Outlook: The technical condition of the market deteriorated this week as the major averages sliced through key MA support levels. The technical indicators have slipped into negative ground with trend indicators bearish, while a rising ADX shows the downtrend is strengthening. Momentum, as measured by the 14-day RSI, is negative and slowing with several indexes seeing that indicator dip below 40 signaling a shift to a bearish trend. The DJIA, S&P 500 and NASDAQ are trading below their respective 50 and 100-day moving averages (MA). The secondary indexes, which include the DJ Transports, small cap Russell 2000 and Philadelphia Semiconductor Index, had outperformed the major averages, but broke support at their 50-day MA, while the Russell 2000 dipped below its 100-day MA on Friday. The Dow, S&P 500 and NASDAQ also have traded below their December lows, which is regarded as a bearish signal over the intermediate term. A look at the different sectors gives a mixed picture as this week's selloff is just a week removed from six of the 11 sectors posting record highs. While Energy (XLE) sector moved higher, there are clear losers in other groups with Consumer Discretionary (XLY) and Financial (XLF) trading below their respective 200-day MA with Financial hitting its lowest level since June 2025. The selloff in software stocks over the last few months pulled the Technology (XLK) sector below its 50 and 100-day MA but it remains above its 200-day MA on strength in semiconductors and the overweighted Mag 7. The VIX shot above 28 during the period on Friday but held the jump which shows increased worry over the pullback. Traders will look for a spike in the VIX that shows capitulation rather than a gradual climb before suggesting a market is attempting to put in a bottom. The Market Edge CTI is projected to stay in a negative configuration through March suggesting downward pressure on the stock market could remain a few more weeks. Last week's downside target for the DJIA of 47,500 was exceeded prompting a new target of 46,300-46,500 which correlates with its 200-day MA. The S&P 500 came within 10-points of its 6700 target. A break below 6700 would leave 6580-6600 as support. The NASDAQ came within 124 points of a 22,000 target and that remains support for the tech heavy index.

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, down two notches from the previous week. Cycles C and D are bullish, while Cycles A, B and E are bearish. The CTI is projected to remain in a negative configuration through March.

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 -2, down four notches from the previous week. Breadth was mixed at the NYSE as the Advance/Decline line lost 3287 units while the number of new 52-week highs exceeded the number of new lows on four sessions. Breadth was negative at the NASDAQ as the A/D line dropped 4166 units while the number of new lows out did the new highs on all five days. Finally, the percentage of stocks above their 50-day moving average dropped to 40.0% vs. 63.3% the previous week, while those above their 200-day moving average fell to 60.9% vs. 67.2% prior. Readings above 70.0% denote an overbought condition, while below 20% is bullish.

Underlying market breadth was mostly negative during the period with the NYSE Advance/Decline Line pushing lower. While the NASDAQ recorded more new 52-lows than highs on each day with new lows expanding. The NYSE was able to post more new highs than lows on each session, but the new highs contracted throughout the period.

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 Negative at -3, unchanged from the previous week.

Investor sentiment is neutral. While investors are backing off their bullish bias, bearish market participants remain hard to find. The American Association of Individual Investors (AAII) reported less retail bulls for a fifth consecutive week, bearish sentiment fell 4.3% to 35.5%, remaining above the historical average of 31% for a fourth straight week. The National Association of Active Investment Managers (NAAIM) Exposure Index increased +4.4% to a neutral 79.3%. The Percentage of Bullish Investment Advisors eased to a neutral 52.7%, but the Percentage of Bearish Investment Advisors also nudged lower to only 14.6%, the fewest since October 2025. The numbers confirm that investors are growing more cautious on equities, but FINRA reported that January Margin accounts rose for a ninth consecutive month to a record high. That could induce more selling from margin calls if the major averages suffer a steeper selloff.

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 (20) - What's Not (10): The following are the strongest and weakest Industry Groups for the period ending 3/05/26. Strongest: Energy, Agricultural, Metals & Mining and Chemicals. Weakest: Insurance, Technology Services, Financial Services and Paper & Forest Products. 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 3/05/26 were: Commodity-Energy (+16.69%), Commodity-Blend (+6.19%), Shorts (+3.98%), Sector-Energy (+3.73%) and Commodity-Agriculture (+1.37%). The weakest categories were: Sector-Basic Materials (-7.04%), International-Emerging (-6.16%), Europe (-5.87%), Sector-Alternative Energy (-5.85%) and International-Developed (-5.74%). To review all the ETF categories in the Market Edge universe, click on the ETF Center tab.

By David L. Blake, CMT