This will be another week full of EPS reports, from the likes of SAP, NUE, GM, VZ, RTX, LMT, PM, GE, PCAR, T, HUM, TSLA, BA, IBM, GD, KO, TMO, GEV, NEE, LRCX, VLO, UPS, AAL, NOC, LHX, CNC, HCA, and CL. There is little economic data, but quite a few Fed speakers. One of the biggest surprises in 2024 has been the spectacular move of the Utility (XLU) sector, with a 32.4% leap and a place atop the eleven S&P 500 sectors. We're pretty confident that no one saw that coming. Of course, these aren't your grandfathers' utilities, but rather "potential" growth stocks where capital gains have taken over for high dividend yields. The conventional electricity industry has soared over 34%, multiutilities are up 22%, and gas distribution has climbed by 17%. Some of the biggest gainers by market cap this year are NEE (+43%), SO (+37%), CEG (+133%), and VST (243%) in conventional electricity; DUK (+28%), D (+32%), and PEG (+50%) in multiutilities; and ATO (+26%), NI (+36%), BIPC (+28%), and NFG (+29%) in gas distribution. Coming in second in the sector race, and maybe another surprise, is Financial (XLF), with a 28% gain. The big industry winner has been property & casualty insurance, spiking 38%. P&C is led by PGR (+59%), CB (+35%), and TRV, ALL and ACGL (all up over 40%). Asset managers have also had a great year, rising 33%. Winners here include BX (+34%), BLK (+26%), APO and BLK (both up over 50%), and BAM (+32%). After that comes Communication Services (XLC +27%), Industrials (XLI +23%), Information Technology (XLK +21%), Consumer Staples (XLP +17%), Materials (XLB +16%), and Real Estate and Healthcare (+14%). With broad strength like that, just throw a dart! (Mark Arbeter, CMT)

The stock market continues to crawl higher, with the S&P 500 (SPX), the S&P 100 (OEX), and the NYSE Composite printing new all-time highs almost daily, and the Nasdaq and the Nasdaq 100 (QQQ) moving ever closer to all-time highs. Yet it continues to amaze us that overall market sentiment/optimism hasn't shot to the moon. Yes some sentiment indicators have crossed over into extreme bullish territory, but many have not. This leaves us looking for reasons why. Some of the sentiment indicators that are showing outright pessimism include Hedge Fund Exposure, the OEX Open Interest Ratio, the OEX Put/Call (P/C) Ratio, and Small Trader Put Buying. On the other end of the spectrum, the CBOE Equity-Only P/C ratio is one of a few indicators that are pretty far into optimistic territory. Meanwhile, the NAAIM Exposure Index, the ISE Equity Call/Put Ratio, the AAII Bull Ratio, the CNN Fear & Greed Index, and the Conference Board's Monthly Survey are showing optimism -- but not to an extreme degree. A coincident sentiment read, the Nasdaq 100 Combo Hedgers Position, is showing very low futures exposure by the smart-money commercial hedgers -- and is therefore a potential negative for stocks. Market breadth remains quite bullish, with the SPX, OEX, QQQ, and S&P 400 advance-decline (AD) lines at or near all-time highs. In addition, 79% of stocks in the SPX are above their 200-day average; for the OEX, it's at 88%; and for the QQQ, it's at 64%. While we would prefer these readings to all be above 70%, the QQQ AD line reached an all-time high before price. (Mark Arbeter, CMT)

After a rough Friday that ended a tough last week, Monday saw a nice comeback for stocks. Are we out of the woods yet? Not from a technical perspective, as many of our shorter-term and some intermediate-term indicators remain bearish. Inflation will be on everyone?s mind this week, although anxiety around price increases has been cut to a dull roar, if anything. August CPI comes out on Wednesday morning, August PPI drops on Thursday, and Friday brings the August Import Prices and September Consumer Sentiment readings. Quarterly EPS reports are mostly done, but we do have news from Oracle and Adobe still to come. All the major mega-cap indices traced out ?inside days? on Monday. That occurs when the entire price range for one day fits inside the range from the prior day. Many times, inside days (or inside weeks) can represent turning points in the overall trend of the market. These days are similar to doji candlesticks, which indicate indecision among buyers and sellers. On Monday, the S&P 500 (SPX), the S&P 100, and the Nasdaq bounced back by 1.2%, while the Nasdaq 100 (QQQ) added 1.3%. Sector strength was broad, with Information Technology, Industrials, Discretionary, Financials, Real Estate, Utilities, and Materials rising between 1% to 1.6%. Seasonality remains tough (into October) because it is an election year. The majors remain in price downtrends since the July peaks, and all are below their 50-day averages. It?s possible they are tracing out a higher low, and at least the Nasdaq and the QQQ could be working on bullish triangles while the SPX could be tracing out a bullish ascending triangle. (Mark Arbeter, CMT)

With each passing day, major indices get closer and closer to their all-time highs (ATHs) from July 10 and July 16 (S&P 500 and S&P 400, respectively). The only major index that has bounced enough to reclaim ATH territory is the NYSE Composite, probably due to the minor 5.6% pullback the index saw in the second half of July and early August. The S&P 500 (SPX) is within 1% of its July 16 all-time closing high of 5,667.20 and remains on its "V" shaped formation and trajectory. The Chande Trend Meter is back up to 83%, indicating a strong and strengthening trend; the Vortex Indicator is close to bullish territory; the 14-day Relative Strength index is back above the midline 50% level; the daily MACD is back in positive territory; and the 21-day rate-of-change has cycled back into bullish territory after dropping into negative territory at the start of August. Some 75% of SPX stocks are above their key 200-day average, while 73% (up from 44% on August 5) are above their 50-day. More impressive, the more-concentrated S&P 100 (OEX) is showing 83% of its stocks above their 200-day average, up from a recent 65%. Both the SPX and OEX advance-decline (AD) lines have surged to ATHs prior to price; historically, that has been very bullish for at least the intermediate-term period. The Nasdaq 100 (QQQ) is 4.5% from its ATH near 503 and its AD line has posted an ATH prior to price. Some 71% of QQQ issues are above their 200-day, up from 44% just 10 days ago, while the percentage above the 50-day has jumped to 61% from 29% on August 7. (Mark Arbeter, CMT)