March 13, 2026

Swings in the price of crude oil prices on headlines over the passage of tankers through the Strait of Hormuz whipsawed investors for a second consecutive week as the Iran War raged on. As oil briefly surged to $120 a barrel as the period opened, the major averages traded sharply lower with the DJIA down 800-points before a late-day report that President Trump had said the war was 'very complete, pretty much'. Stocks staged a vicious rally leaving the major averages higher with the NASDAQ leading the advance, gaining +308.27 points (+1.38%). An early dip was bought on Tuesday off headlines of the International Energy Agency (IEA) saying they could release oil reserves with the G7 adding they would take all necessary measures, including drawing on strategic oil reserves, to stabilize the oil market. The different indexes closed mixed as buying in semiconductors kept the NASDAQ positive. Higher yields off a February CPI report that showed inflation remained sticky left the major averages mixed again on Wednesday. Technology (XLK) was the strongest sector on a +9.16% jump in Oracle (ORCL) after earnings and gains in semiconductors. Another surge in crude oil prices to $100 a barrel on Thursday sent the different indexes sharply lower as dip buyers stayed on the sidelines. Another spike in oil prices ahead of the weekend on more saber rattling left the major averages down again on Friday. While the oil trade left the Energy (XLE) sector near a record high during the period, Utilities (XLU) also closed positive. Financial (XLF), Consumer Discretionary (XLY) and Industrial (XLI) were the weakest market groups down more than -3%. Rising fuel costs also weighed on transportation stocks with the Global Jets ETF (JETS) down -15% over the last two weeks and falling back to a level last seen in November 2025. When the dust settled the DJIA, S&P 500 and NASDSAQ were down for a third consecutive week. Next week, economic data could begin to show the effects of the Iran War, while investors will tune in to Fed Chair Powell's press conference on Wednesday at the conclusion of the March FOMC Meeting. Currently the CME Group FedWatch projects a 99% probability that the Federal Reserve will leave rates unchanged, much to the chagrin of the President. Equities will also be led by headlines from the Iran War and swings in crude oil prices.

For the period, the DJIA lost 943.08 points (-2.0%) and settled at 46558.47. The S&P 500 slipped 107.83 points (-1.6%) and closed at 6632.19. The NASDAQ fell 282.32 points (-1.3%) finishing at 22,105.36. The small cap Russell 2000 dropped 45.25 points (-1.8%) and settled at 2480.05.

Market Outlook: The technical condition of the market continued to deteriorate this week as the major averages struggled to make headway against rising oil prices from the war. The technical indicators are in negative ground with trend indicators including the MACD, bearish. 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 major averages also show a bearish chart pattern of lower highs and lower lows that began in early February. Stochastics, however, show only the DJIA and DJ Transports oversold on Friday. The DJIA and S&P 500 are trading below their respective 50 and 100-day moving averages (MA) but remain above support at their 200-day MA, but the NASDAQ slipped below that key MA on Friday for the first time since April 2025. The secondary indexes, which include the DJ Transports, small cap Russell 2000 and Philadelphia Semiconductor Index broke support at their 50-day MA, while the Russell 2000 trades also fell below its 100-day MA. 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. The VIX touched 35 on Monday, its highest mark since April of 2025, after the spike in oil prices over the prior weekend. While it dropped back to 22 on the report the Iran War was nearly over, it drifted higher again during the week as it became clear the Iran conflict could go longer than expected. While traders look for a capitulation in the VIX to signal that the market is attempting to put in a bottom, this week's slow grind higher isn't an indication that the selloff is coming to an end. However, as we saw on Monday, reports that the war is ending will most likely trigger a fierce rally. The Market Edge/S&P Short range Oscillator (SRO) closed Friday at -7.87% and historically that has led to professional money managers beginning to buy oversold stocks which could lead to a relief rally to start the week, especially if the war doesn't escalate over the weekend. The Market Edge CTI is projected to stay in a negative configuration through March however, suggesting downward pressure on the stock market could limit any counter bounce. A new downside target for the DJIA of 46,300-46,500 which correlates with its 200-day MA remains in place. The S&P 500 second target is 6580-6600. The NASDAQ target remains 21,800- 22,000.

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 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, unchanged from the previous week. Breadth was negative at the NYSE as the Advance/Decline line lost 3410 units while the number of new 52-week lows exceeded the number of new highs on five sessions. Breadth was also negative at the NASDAQ as the A/D line dropped 4183 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 dropped to 25.1% vs. 40.0% the previous week, while those above their 200-day moving average fell to 50.4% vs. 60.9% prior. Readings above 70.0% denote an overbought condition, while below 20% is bullish.

Underlying market breadth is negative with the NYSE and NASDAQ Advance/Decline Lines pushing lower. The NASDAQ recorded more new 52-lows than highs on each day for a second straight week, while the NYSE put up more new lows than highs for the first time since mid-November.

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 +0, up three notches from the previous week.

Investor sentiment is neutral as both retail and professional investors became more cautious. The American Association of Individual Investors (AAII) reported a dip in retail bulls for a sixth consecutive week, hitting its lowest percentage since August 2025. At 31.9% bulls, that's a fourth consecutive week below the historical average of 37.5%. The National Association of Active Investment Managers (NAAIM) Exposure Index dropped -12.3% to a neutral 67.0%. That is the lowest exposure to equities for money managers since May 2025. While the Percentage of Bullish Investment Advisors eased to a neutral 49.1%, the Percentage of Bearish Investment Advisors jumped to 21.8%, the most since mid-August 2025. The numbers reflect bearish sentiment is rapidly increasing, but don'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 (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