Today's number is... 16

My sentiment composite hits a fresh 16-month high. 

Here’s the chart:

Let's break down what the chart shows:

• The black line in the top panel represents the price of the S&P 500 index.
• The black line in the bottom panel represents my sentiment composite, which includes six different sentiment data points: AAII Bull Bear Spread, II Bull Bear Spread, NAAIM, CBOE Volatility Index, Equity Put Call Ratio 5-Day, and Put Call Ratio 10-Day.

The Takeaway: We are currently seeing more bears than bulls enter the market, as my sentiment composite has reached a new 16-month high. It's remarkable how price action can influence sentiment. Just six months ago, we were experiencing optimism, but now the environment for investors has turned much more pessimistic.

While I acknowledge that this sentiment composite is not perfect, it does provide a useful perspective on what investors are thinking at the moment. 

The way I use sentiment is to determine whether it acts as a potential tailwind...

Today's number is... 50%

More than 50% of stocks listed on the NYSE reached 52-week lows last week.

Here’s the chart:

Let's break down what the chart shows:

• The black line in the top panel is the S&P 500 index price.
• The red lines in the bottom panel show the percentage of NYSE stocks making 52-Week New Lows.

The Takeaway: The stock market can only decline with an expansion in the new lows list, it's simple math… and you know what… The number of stocks making new lows expanded to its fourth-highest level over the past 17 years.

That's expansion!

No two ways about it…

Last week, among the 2,862 stocks listed on the NYSE, 1,475 made new 52-week lows…

That's over half of the stocks that are listed on the NYSE exchange! 

These are not levels you see during a bull market.

Moving forward from here, the Bulls must first stop stocks from declining. They have been trying to put something together, but have yet to show any type of back-to-back follow-through just yet. 

Is there...

Today's number is... 42nd

The 10-week moving average of the S&P 500 has fallen below the 40-week moving average for the 42nd time since 1950.

Here’s the chart:

Let's break down what the chart shows:

• The black line is the S&P 500 index price.
• The blue line is the 10-week moving average of the S&P 500 index price.
• The red line is the 40-week moving average of the S&P 500 index price.
• The gray lines highlight when the 10-week moving average crosses below the 40-week moving average - Also known as a Death Cross.
• The table showcases the forward returns of the S&P 500 following a Death Cross.

The Takeaway: The trend is your friend until it bends, and the S&P 500 has been in an uptrend for the past 115 weeks.

But that changed last week when the S&P 500 experienced a Death Cross, which adds to the evidence in favor of Bears.

But what exactly is a Death Cross?

A Death Cross is a technical indicator that occurs when a short-term moving...

Today's number is... 0.09

The St. Louis Fed Financial Stress Index has risen above the zero line, increasing to 0.09.

Here’s the chart:

Let's break down what the chart shows:

• The blue line represents the price of the S&P 500 index.
• The green/red line represents the St. Louis Fed Financial Stress Index. When the line is green, it indicates that financial market stress is lower than normal. Conversely, when the line is red, it indicates that financial market stress is higher than normal.
• The St. Louis Fed Financial Stress Index measures financial stress in markets and is published by the Federal Reserve Bank of St. Louis. This index is constructed from 18 weekly data series: seven interest rate series, six yield spreads, and five other indicators. Each of these components provides insights into different aspects of financial stress.

The Takeaway: Here is another data point for the bears…

The St. Louis Fed Financial Stress Index has reached its highest level of market stress...

Today's number is... 3rd

Yesterday's daily move of +9.5% for the S&P 500 was its third-best day going all the way back to the 1950s.

Here’s the chart:

Let's break down what the chart shows:

• The blue line in the top panel is the S&P 500 index price.
• The green & red lines in the bottom panel is the daily percentage change.
• The table showcases the forward returns for the top 20 best days for the S&P 500.

The Takeaway: If you have been following my daily notes this week, you would have seen on Monday that I noted that a massive back-to-back price drop could indicate that we had reached a market bottom. On...

Today's number is... 50%

More than 50% of the stocks in the S&P 500 are currently in oversold conditions.

Here’s the chart:

Let's break down what the chart shows:

• The blue line in the top panel is the S&P 500 index price.
• The black line in the bottom panel is the percentage of S&P 500 stocks oversold (Daily RSI14 less than 30) 
• The gray lines indicate when the percentage of S&P 500 stocks oversold crosses above 50.

The Takeaway: The recent environment has not encouraged risk-seeking behavior. We have now entered a phase where many risk assets have broken lower from topping formations and are now retesting prior cycle highs.

When we take a look under the hood, we find that over 50% of the stocks in the S&P 500 are now oversold (Daily RSI falling below 30). This level of oversold conditions has not been seen since the market crash of 2020.

So, I dug into the data to see what typically happens to the market when the majority of S&P 500 stocks become...

Today's number is... 28.5

My 'Fear or Strength' model has shifted into tactical bullish mode because the Volatility Index (VIX) is above 28.5.

Here’s the chart:

Let's break down what the chart shows:

• The black line in the top panel is the S&P 500 index price.
• The green shading highlights the model is in bullish mode.
• The red shading highlights the model is in bearish mode.
• The black line in the middle panel is the 10-day average of the NYSE+NASDAQ net new high advance-decline line - The model's ‘strength’ component. The gray shading represents the AD line is rising.
• The black line in the bottom panel is the Volatility Index, which is the model's ‘fear’ component. The gray shading represents the VIX reading above 28.5.

The Takeaway: The ‘fear’ component of this model has been triggered as the VIX reading is above 28.5. 

But why is the 28.5 threshold...

Today's number is... -4%

The S&P 500 posted back-to-back -4% down days last week. 

Here’s the chart:

Let's break down what the chart shows:

• The black line is the S&P 500 index price.
• The red lines highlight the days the S&P 500 posted back-to-back -4% down days. 

The Takeaway: At the end of last week, we experienced some significant daily declines. On Thursday, the market fell by 4.8%, and things worsened on Friday, with a decline of 5.9%. 

When we take a look at the data, consecutive days with drops of -4% or less are relatively rare. However, this kind of weakness in a bear market could indicate that the worst may be behind us.

It's important to keep in mind that the sample size is small, so we should approach this information cautiously. Nonetheless, historical data tells us that after such big back-to-back declines, future returns tend to be very strong.

On average, one year later, stocks typically rise by over 30%. 

Do you view this data as...

Today's number is... -20.8%

The average stock in the S&P 500 is currently in a bear market, with a decline of -20.8%.

Here’s the chart:

Let's break down what the chart shows:

• The blue line in the top panel is the S&P 500 index price.
• The red line in the bottom panel shows the average 52-week drawdown of S&P 500 Stocks.

The Takeaway: Yesterday, the S&P 500 experienced a massive decline, dropping by 4.8%. This marks the largest one-day decline for the index since June 2020.

2025 has been quite the ride so far. In early February, the S&P 500 was at all-time highs. However, just 31 trading days later, the index is down over -12%. 

And right now, the average stock in the S&P 500 is in a bear market… Down -20.8%

If you took the time to look under the hood, you'd see that most stocks have not been rising for a while. While some stocks have performed well, the majority have not.

Breadth has been telling us that the market was weak… 

And yesterday things got worse…...

Today's number is... 639

The S&P 500 has gone 639 consecutive trading days without a -3% decline.

Here’s the chart:

Let's break down what the chart shows:

• The blue line in the top panel is the S&P 500 index price.
• The black lines in the bottom panel indicates the number of consecutive days since the S&P 500 experienced a daily move of -3% or less.

The Takeaway: As I write this daily note, the S&P 500 futures are down over 3% after Trump imposed tariffs on most countries around the globe last night.

The last time the S&P 500 experienced a drop this significant was 639 trading days ago, which was during the cost-of-living crisis in 2022.

Since the beginning of the 1990s, there have been 104 days with a change of -3% or less, with most of these down days happening while the market was in a sizeable drawdown.

When examining the S&P 500's forward returns, we find that on days with a decline of -3%, there is only a 55% chance the market will be positive two weeks later.

As...

Today's number is... 4

Here is a four-panel chart showing the recent strength of gold and its outperformance versus the other main asset classes.

Here’s the chart:

Let's break down what the chart shows:

• The yellow line is the Gold ETF index price.
• The blue line is Gold relative to Bonds.
• The gray line is Gold relative to Stocks.
• The black line is Gold relative to Commodities.

The Takeaway: If you didn't know already, we’re in the midst of a massive gold rush.

Gold has been an outstanding place for your money since breaking out of its multi-year base in early 2024.

The new absolute and relative highs we’re seeing are signals of strength, not weakness. 

When the lines go from the lower left to the upper right, we call those uptrends.

Right now, gold is at fresh all-time highs on an absolute basis, and it’s showing remarkable strength with 4-year highs relative to US stocks. Additionally, gold is achieving new all-time highs relative to bonds, and it’s also making 4...

Today's number is... 22

My Risk-On/Risk-Off ratio has reached a 22-month low, dropping below a key level that acted as resistance in 2021/22, which transformed into support from 2023 to the present.

Here’s the chart:

Let's break down what the chart shows:

• The black line is my Risk-On/Risk-Off ratio.
  • The Risk-On components consist of Copper (HG1), High Yield Bonds (JNK), Aussie Dollar (AUDUSD), Semiconductors (SOXX/SPY) & High Beta (SPHB/SPY).
  • The Risk-Off components consist of Gold (GC1), US Treasury Bonds (TLT), Yen (JPYUSD), Utilities (XLU/SPY) & Staples (XLP/SPY).
• If this ratio rises, the numerator (risk-on) is outperforming the denominator (risk-off); if it is falling, the denominator (risk-off) is outperforming the numerator (risk-on).

The Takeaway: The message right now continues to be… we are in a Risk-Off environment. 

This looks to be a pivotal moment for the US stock market. With this key level now broken, it reinforces the weak market conditions I’ve been...