1. Invest-Safely.com
    2. >>
  2. Tracking the Stock Market
    3. >>
  3. Stock Market Outlook - 2026-02-01

Stock Market Outlook: February 1st =
Uptrend


The stock market outlook continues to show an uptrend in place for the S&P500, indicated by bullish designations for 2 of 3 technical indicators:
    ADX Directional Index: Bearish
    Institutional Activity: Bullish
    On Balance Volume: Bullish

Oil, Energy, and High Dividend payers outperformed, metals / crypto crashed, reaction to earnings was mixed, and the FOMC held rates steady.  A partial government shutdown, ISM survey results and jobs data will shape the week ahead.

TREND ANALYSIS

The S&P500 ( $SPX ) rose 0.3% last week, continuing to trade above key levels:
  • ~1% above the 50-day moving average
  • ~8% above the 200-day moving average
Despite the volatile price action, indicators start the week unchanged:
  • ADX direction indicators flipped to bearish during the week, but reversed on Thursday
  • Selling volume increased last week, but only triggered one distribution day and price remains above the 50 dma, keeping a bullish trend in place
  • On-balance volume remains above its trendline

Technical analysis chart of $SPX showing 6 months of candlesticks with 21-day, 50-day, and 200-day moving averages, volume with EMA(50), ADX(14) with +DI and -DI, and OBV with MA(62) through 2026-02-01.

Technical Analysis – $SPX – 2026-02-01

PERFORMANCE HIGHLIGHTS & COMPARISONS

S&P500 Sectors

Energy ( $XLE ) outperformed for the second consecutive week; Healthcare ( $XLV ) underperformed.  Technology ( $XLK ) eased back to neutral after a slew of Mag  7 earnings, while Financials ( $XLF ) regained neutral bias.

Performance comparison of S&P500 sector ETFs ($XLC, $XLY, $XLP, $XLE, $XLF, $XLV, $XLI, $XLB, $XLRE, $XLK, $XLU, $SPY) showing 1-week, 4-week, and bias-shift returns.

S&P500 Sector Performance – 2026-02-01

S&P500 Investing Styles

High Dividend ( $SPHD ) led upside performance, which hasn't happened in a long time.  But it was Small Cap Growth falling 3% that really stood out within sector styles.  Mega Cap Growth ( $OEF ) returned to bullish bias, and Defensives ( $POWA ) hit neutral.

Performance comparison of investment style ETFs ($SPHB, $SPLV, $IWO, $IJH, $IWF, $OEF, $IWN, $IJJ, $IWX, $MTUM, $QUAL, $SPHD, $POWA, $SPY) showing 1-week, 4-week, and bias-shift returns.

Style Performance vs. S&P500 – 2026-02-01

Asset Classes

The moves in metals continue to dominate global headlines.  Oil ( $USO ) quietly led asset classes higher last week, gaining almost 8%.  Bitcoin ( $IBIT ) was the biggest loser, as the leverage continues to be unwound across the cryptocurrency space.  U.S. Bonds ( $IEF ) moved up to neutral bias, and EM bonds ( $PCY ) improved to bullish.

Performance comparison of major asset class ETFs ($USO, $IBIT, $GLD, $SPY, $VEA, $EEM, $IEF, $BNDX, $PCY, $DXY) showing 1-week, 4-week, and bias-shift returns relative to the U.S. Dollar.

Asset Class Performance vs. U.S. Dollar – 2026-02-01

COMMENTARY

Markets

The metals rally we discussed last weekend reversed violently on Thursday:  Silver futures collapsed from a high of $121.79 to a low of $74! That's a 39% peak‑to‑trough unwind in less than 2 days. Platinum's overall move was similar, but took a few more sessions.

Macroeconomic Data and Policy

Mega‑cap tech delivered generally good headline numbers, but weaker than expected guidance and/or margin compression caused a few names to sell off.

December PPI rose 3.0% year-on-year, unchanged from November but higher than expectations for 2.7%.  Increases in services prices drove the surprise upside.

The FOMC held rates steady and emphasized a data‑dependent path forward. On Friday, President Trump announced Kevin Warsh as his nominee to replace Powell as head of the Federal Reserve.  A lot of ink was spilled on what Mr. Warsh has said in the past, regarding Fed policy.  What he will do if/once he's confirmed as Chairman is another matter.  The current expectation is a mix:  hawkish on the balance sheet ( reducing liquidity ) and dovish on interest rates ( potential cuts ).

Geopolitics

A partial U.S. government shutdown began over the weekend; a funding package passed the Senate late Friday, but still needs approval from the House of Representatives on Monday.

EYES ON THE HORIZON

This week brings several important data releases:
  • Monday: ISM Manufacturing PMI
  • Tuesday: December JOLTs Job Openings
  • Wednesday: ISM Services PMI
  • Thursday: --
  • Friday: Non Farm Payrolls & Michigan Consumer Sentiment

Best to Your Week!

P.S. If you find this research helpful, please tell a friend.
If you don't, tell an enemy.

Share this post on social media:

Follow Invest Safely:

Facebook (@InvestSafely)
X / Twitter (@investsafely)
LinkedIn (@Invest-Safely)
Instagram (@investsafely)

Content Sources: Bloomberg, CNBC, Federal Reserve Bank of St. Louis (FRED), Hedgeye, StockCharts.com, TradingEconomics.com, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics.
Price and Volume charts provided courtesy of stockcharts.com.

Performance Methodology: All sector performance data is sourced from ThinkorSwim and reflects price‑only returns calculated using end‑of‑week closing data. Bias classifications follow a proprietary Invest Safely, LLC model and update only when trend conditions meet predefined thresholds. All calculations are consistent across every chart on this page.

Disclaimer: Invest Safely, LLC is an independent investment research and online financial media company. Use of Invest Safely, LLC and any products available through Invest‑Safely.com is subject to our Terms of Service and Privacy Policy.

Not a recommendation to buy or sell any security.

Looking for more information on the Stock Market Outlook Signals? You'll find it here:



If you're interested in learning more about the relationship between price and volume, or how to find and trade the best stocks for your growth strategy, check out this book via the following Amazon affiliate link:

How to Make Money in Stocks: A Winning System in Good Times and Bad.

It's one of my favorites.

In the past, I reviewed market outlook signals as if they were a mechanical trading system, while pointing out issues and making adjustments. The goal is to give you to give you an example of how to analyze and continuously improve your own systems.

For historical Elliott Wave commentary and analysis, go to ELLIOTT WAVE lives on by Tony Caldaro.

IMPORTANT DISCLOSURE INFORMATION
This material is for general communication and is provided for informational and/or educational purposes only. None of the content should be viewed as a suggestion that you take or refrain from taking any action nor as a recommendation for any specific investment product, strategy, or other such purpose. Certain information contained herein has been obtained from third-party sources believed to be reliable, but we cannot guarantee its accuracy or completeness.
To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisors of his/her choosing. Invest Safely, LLC is not a law firm, certified public accounting firm, or registered investment advisor and no portion of its content should be construed as legal, accounting, or investment advice.
The material is not to be construed as an offer or a recommendation to buy or sell a security nor is it to be construed as investment advice. Additionally, the material accessible through this website does not constitute a representation that the investments described herein are suitable or appropriate for any person.
Hypothetical Presentations:
Any referenced performance is “as calculated” using the referenced funds and has not been independently verified. This presentation does not discuss, directly or indirectly, the amount of the profits or losses, realized or unrealized, by any reader or contributor, from any specific funds or securities.
The author and/or any reader may have experienced materially different performance based upon various factors during the corresponding time periods. To the extent that any portion of the content reflects hypothetical results that were achieved by means of the retroactive application of a back-tested model, such results have inherent limitations, including:
Model results do not reflect the results of actual trading using assets, but were achieved by means of the retroactive application of the referenced models, certain aspects of which may have been designed with the benefit of hindsight
Back-tested performance may not reflect the impact that any material market or economic factors might have had on the use of a trading model if the model had been used during the period to actually manage assets
Actual investment results during the corresponding time periods may have been materially different from those portrayed in the model
Past performance may not be indicative of future results. Therefore, no one should assume that future performance will be profitable, or equal to any corresponding historical index.
The S&P 500 Composite Total Return Index (the "S&P") is a market capitalization-weighted index of 500 widely held stocks often used as a proxy for the stock market. Standard & Poor's chooses the member companies for the S&P based on market size, liquidity, and industry group representation. Included are the common stocks of industrial, financial, utility, and transportation companies. The S&P is not an index into which an investor can directly invest. The historical S&P performance results (and those of all other indices) are provided exclusively for comparison purposes only, so as to provide general comparative information to assist an individual in determining whether the performance of a specific portfolio or model meets, or continues to meet investment objective(s). The model and indices performance results do not reflect the impact of taxes.

Investing involves risk (even the “safe” kind)! Past performance does not guarantee or indicate future results. Different types of investments involve varying degrees of underlying risk. Therefore, do not assume that future performance of any specific investment or investment strategy be suitable for your portfolio or individual situation, will be profitable, equal any historical performance level(s), or prove successful (including the investments and/or investment strategies describe on this site).