SMO Exclusive: U.S. Stock Market Strength Report 2024-02-02 (-75%, no new Longs)

Brian Degracia

04 Feb 2024 • 5 min read

U.S. Market week ending 2/2/24 WEAKENING – last week’s leader Banking WEAKENED 2 levels, weakest Utilities still weakest, Energy also weakened. Strongest industries: Insurance and Materials & Construction (including Homebuilders). Attached: an objective answer to “How is the overall market doing right now?”

Other interesting questions answered:
🔹 Are current market strengthening/weakening conditions more conducive to new longs or to new shorts?
🔹 Is market strengthening or weakening early or late in a meaningful cycle?
🔹 What are the strongest-rated stocks in strengthening sub-industries and industries?
🔹 What are the weakest-rated stocks in weakening sub-industries and industries?

(Congratulations POWL/Powell Industries holders, Manufacturing- Industrial Electrical Equipment sub-industry, on a +60% week. This after being up >118% 1/1/23 through 1/26/24, and +275% from a cherry-picked 9/27/22 through 1/26/24. +275% in 16 months preceded last week’s +60% blast-off. Is there really any controversy about strength begetting strength?)

DID YOU KNOW?

What IS:
The overall market is WEAKENING week of/ending 2/2/24.
🔹 The -75% market strength score = late “no new longs” territory
🔹 Average Industry Strength Score = 4.5 (scale 1 = strongest 9 = weakest, -0.4 vs. previous week 4.1)
🔹 0 of 29 industries strengthened and 9 weakened last week (vs. 8/0 previous week)
🔹 13% vs. 60% sub-industries Strengthening vs. Weakening (vs. 56%/13% previous week, 199 total Sub-industries)
🔹 Insurance and Materials & Construction = strongest industries at Strong (3rd strongest of 9 levels)

Life Insurance = strongest of Insurance sub-industries at Very Strong (2nd strongest)
Cement, General Contractors, Residential Construction = strongest of Materials & Construction sub-industries at Strongest (1st strongest)

🔹 Utilities = weakest industry at Weaker (7th strongest), Water Utilities = weakest of its sub-industries at Very Weak (8th strongest of 9 levels)

What WILL BE:
I have no idea. Neither does anyone else. Execute your plan and follow your rules based on what IS.

WHAT’S INSIDE?
Few stocks buck the market trend.

At the same time, the market can only do what its underlying stocks do.

“What’s inside” is a detailed look at what you can find out about the market, sectors, industries, sub-industries, and individual stocks when you analyze a factor common to all of these: their strengthening and weakening.

WHO CARES?
Anyone who wants a U.S. stock market advantage. Really helpful if you agree with the following:

The stronger your stocks, the greener your P&L.
The journey to 100%+ returns begins with 10% returns.
The journey to a multi-month rally begins with one up week.
Most stocks do what the market does. (While the market can only do what its underlying stocks, sub-industries, and industries do.)
80/20: not all information is created equal. (Press buttons, not balloons.)

Following are galleries with page-by-page views of this report.