No-Advice Disclaimer: This analysis is for informational purposes only and not a recommendation to buy or sell any security.

Stock Market Outlook: August 16th =
Uptrend

Author: J.Wenger ---- Published: August 16, 2026 ---- Last Updated: 2026-08-16
Disclosure: The author holds no material positions in the securities mentioned. See Editorial Policy & Disclosures for details.

The stock market outlook shows an uptrend in place for U.S. equities.

Oil, Energy, and Momentum outperformed; Bitcoin, Consumer Discretionary, and Mega-Cap Growth underperformed.  Investors focused on AI-spend, corporate buybacks, and inflation, although global instability continues to percolate behind the scenes.

TREND ANALYSIS

The S&P500 ( $SPX ) rose 0.4% last week.  The index is:

  • ~4% above the 50-day moving average
  • ~10% above the 200-day moving average
No change in our 3 technical indicators last week; all of them remain bullish.

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 2026-03-22.

Technical Analysis – $SPX – 2026-08-16

PERFORMANCE HIGHLIGHTS & COMPARISONS

Asset Classes

Oil ( $USO ) rebounded last week, recovered bullish bias, and led assets higher on geopolitical tensions.  Bitcoin was the worst performer.  Emerging Market Equities moved back up to neutral bias.

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 – 2026-08-16

S&P500 Sectors

The Energy sector ( $XLE ) outpaced all sectors by a wide margin last week, thanks to the gains in oil.  Consumer Discretionary ( $XLY ) was the worst sector.  Communications ( $XLC ) upshifted back to bullish 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 – 2026-08-16

S&P500 Investing Styles

Momentum and High Beta ( $MTUM, $SPHB ) led investing styles higher, while Mega Cap Growth and Defensives  ( $OEF, $POWA ) lagged.  Momentum bounced back to bullish bias, putting the entire space in risk-on territory.

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 – 2026-08-16

COMMENTARY

Markets

Stocks thrived this earnings season, with the SPX closing higher for a third straight week.  Earnings growth, AI-related investments and large corporate buyback programs outweighed geopolitical and inflation worries.  Bonds were not so lucky, as investors demand higher rates to compensate for higher energy prices and military conflict risks.

Macroeconomic Data and Policy

The July CPI print showed inflation at 3.4% y/y, decelerating slightly from June's level, but well above last year's +2.7%.  Core came in at +2.5% y/y, which was a welcome improvement versus last year's +3.1%.

Wholesale prices (PPI) came in at +4.7% for July, well above last year's +3.2% but easing month over month.  Core PPI (excluding trade, food, and energy) was +4.2%, which was also lower month over month, but still higher than last July's reading of +3.5%.

With the rate of inflation easing slightly since May, the implied probability of a September rate hike dropped to 40% (from 55%).

Geopolitics

Ongoing tensions in West Asia remain ongoing. Iran rejected formal talks with the U.S., as they continued to work with Oman on a regional agreement. Meanwhile, Iraq and Syria are planning to collaborate on a pipeline designed to route crude straight to the Mediterranean.

Another potential escalation path was added to the mix, with the signing of a NATO-style mutual defense pact between Saudi Arabia, Turkey, and Pakistan.

EYES ON THE HORIZON

A light week of economic data, with the only "real" catalyst related to the last FOMC meeting.

  • Monday: --
  • Tuesday: Building Permits
  • Wednesday: FOMC meeting minutes
  • Thursday: --
  • Friday: --
Best to Your Week!

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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.


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Not a recommendation to buy or sell any security.

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

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.

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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.
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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.

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