It’s quiet out there… too quiet.

The stock market continued its lethargic grind higher yesterday. The S&P 500 closed near an all-time high at 2404. But the unheard sound of champagne corks not popping was deafening.

Perhaps that’s because fewer and fewer stocks are participating in the rally. Back in January, over 80% of the stocks in the S&P 500 were trading above their 50-day moving average (MA) lines. Today, it’s down to 58%.

So, as the market grinds higher, fewer stocks are grinding along with it.

That’s yet another caution sign for the broad stock market… right up there along with a 20-year low in the Volatility Index.

Stocks can grind even higher in the face of caution signs, of course. But those sorts of gains are often given back.

With that in mind, here’s what to look for in the action today…


S&P 500 futures are popping higher in overnight trading. If the gains hold until the opening today, then the index will likely hit our long-held target of 2411.

Most of the daily technical indicators are still far from hitting overbought levels. So, there’s room to run if the bulls want to press higher.

It’s worth noting, though, that financial stocks are lagging the market here. While the S&P is breaking out to new highs, the Financial Select Sector Fund (XLF) is still trading below its 50-day MA.

Take a look…

A declining financial sector is like an anchor around the neck of the broad stock market. In order for the stock market to move even higher from here, the financial sector is going to have to join the party.

I’ll update Delta Report readers on these trends throughout the day on Jeff Clark Direct.

Best regards and good trading,

Jeff Clark


Jeff’s note: I’ve been working on a new system designed to trade stocks around their earnings announcements. I traded the system 41 times over the past year with my own money. 37 of the trades were profitable, with average gains of almost 50%. And the average time in the trades was less than two days.

On Tuesday, I showed my Delta Report subscribers a trade based on my earnings system… They had the chance to make 80% buying puts on homebuilder Toll Brothers (TOL) in the morning and selling them in the afternoon. The trade moved quickly, so not everyone was able to get in. But if you’re a Delta Report reader and you did make the trade, let me know here. (If you were able to make our earnings trade on retailer Urban Outfitters last week, please write in as well.)

Response to your whiners…what is up with these guys? I've traded on the Congo in Africa using a hot spot, In Baghdad with crap internet. We make good trades with you Jeff, win some lose some, but that’s option trading. I lost $750 on SHLD last week because I was 1 week short on my date (I chose a TD weekly) won’t do that again, I too am upside down on MCD but I only have 4 options. No biggie, hell it may come back to us. Sold all my QCOM and did well. Thanks for your help and let’s make some more money! I only trade for profit and love the risk!

– Karl H.

Hi Jeff, I wanted to thank you for information that wasn't hyped. It is good to read levelheaded information about the stock market. Some of the investment reports I get or so gloom and doom that they were a little value.

– Jim C.