Thu, Mar 19, 2026|Corey McLaughlin

The S&P 500 Is Near 'No Man's Land'

The market breaks its long-term uptrend... Entering 'no man's land'... 45% of stocks are still holding up... That's good news, bad news... Preparing for a 'bear market breakpoint'... The trouble with cyclical stocks...

For much of today, it was more of the same for the market...

And unless you own energy stocks, that's probably bad news for your portfolio.

Oil prices were higher. U.S. stocks were a little lower, and the energy sector of the S&P 500 Index was the biggest gainer...

The State Street Energy Select Sector SPDR Fund (XLE) is now up 33% for the year, far outpacing any other sector. Utilities are the next-best performer at 8%, and consumer staples at almost 6% after that. The S&P 500 is now down almost 4% for the year.

Late this afternoon, Israeli Prime Minister Benjamin Netanyahu declared that Iran is now incapable of enriching uranium, said Israel was helping the U.S. open the Strait of Hormuz, and predicted that the war could end sooner than people think.

His words appeared to briefly lower oil prices and juice stocks in the final hour of trading, but the indexes still mostly finished slightly lower.

The war has damaged energy infrastructure in Iran and other Persian Gulf nations. Capacity can't bounce back overnight even if the U.S. and Israel are about to unlock oil and gas shipments through the strait. This means energy prices are staying elevated for now.

Among other things, costly oil and gas have reintroduced longer-term inflation concerns in the market and has put Federal Reserve policy in a bind. This could lead to further volatility ahead. We've already had plenty lately.

Dusting off our market health indicators...

For the first time since last spring and the rebound from the Liberation Day panic, the S&P 500 today traded below its 200-day moving average (200-DMA). That's the simple technical measure of its long-term trend.

Things have been heading this way for a bit, with the S&P 500 first falling below its shorter-term 50-day moving average last month...

It's a similar story for the Nasdaq Composite Index and Dow Jones Industrial Average. Only the small-cap Russell 2000 Index remains above its 200-DMA, and barely.

This action doesn't guarantee anything about future market direction. But as we've written about before, it is a signal about the general trend in the market and a good first look at strength or weakness.

Traders like our colleagues Greg Diamond and Chris Igou frequently write about the utility of moving averages. For example, Chris wrote last May in DailyWealth Trader that as the S&P 500 broke back above its 200-DMA, it signaled a new bull run beginning...

The 200-DMA is the trend. So if it's rising, we know the trend is up and we'll want to own the overall market.

Second, the 200-DMA can act as "resistance" or "support" for price movements. It's "resistance" when a stock rises up to it from below but then turns lower and starts a new downturn.

However, if the stock breaks through that resistance, the trend line typically becomes support.

Chris was right. The S&P 500 gained about 18% from when he wrote that on May 15 through late January, when the U.S. benchmark index made its most recent all-time high.

Now we're looking at U.S. stocks breaking through 'support'...

One day does not make a trend, but things have already been heading this way for a bit.

Our colleague Mike Barrett wrote in February in Select Value Opportunities that the "market downturn is just beginning." And he updated his subscribers on March 4, using the 200-DMA as an indicator...

In a healthy market, [the S&P 500 and Nasdaq 100] trade above their 200-DMA trend lines. (Note: The daily price action moves faster than the slope of the 200-DMA. So this indicator helps us keep track of how the price action is trending.)

When the Nasdaq 100 reached an all-time high of 26,182 on October 29, 2025, it was 19% above its 200-DMA (22,019). The S&P 500 reached an all-time high of 7,002 on January 28, and was 9% above its 200-DMA (6,413) at the time.

Both indexes are now pushing downward. They're also converging on these all-important trend lines... As of last Friday, the Nasdaq 100 was just 4% above its 200-DMA. And the S&P 500 was within 5% of its 200-DMA. We expect both indexes to continue falling toward their respective 200-DMAs.

Keep in mind that these trend lines often mark technical support – a kind of price "floor." And it's likely that investors would resume buying stocks as the major indexes test their 200-DMAs. Look for this to occur later in March or in April.

And as we wrote just on Monday...

As of today, the benchmark index is only 4% away from a new record high, and is trading about 1% above its longer-term, 200-day moving average. This could be a good sign (if the technical support level holds), or a warning sign of more downside.

With the S&P 500 today below its long-term moving average, our concern is raised. Barring a quick snap higher in the next few days, this means the U.S. benchmark index will be in "no man's land," without a clear technical support level. That's not a great place to be.

There is room for more downside ahead...

Several indicators are worth following... I (Corey McLaughlin) especially like to track the number of individual stocks in the S&P 500 or the entire New York Stock Exchange that are trading above their 200-DMA.

This gives us a good look at market "breadth" or health, essentially the number of stocks trending up versus down. This indicator offers a window into what could happen next in the market. And I find it especially useful when thinking about significant market tops or bottoms.

It's simple, really... When the market is flagging (like right now), I want to see more stocks below their long-term trend. If more are still above their 200-DMAs, it means more stocks still have room to fall.

Today, around 45% of S&P 500 stocks are above their 200-DMAs. That's good news, bad news...

During major downturns, market bottoms typically coincide with much lower readings, like closer to 15% last April and during the bear market bottom in 2022... Even fewer stocks were above their 200-DMAs during the COVID-19 panic bottom in 2020.

We used this indicator to mark that bottom nearly to the day.

But we're not saying this is a major downturn right now. Yes, there's a lot of uncertainty around the war in Iran right now. That has been the trigger for the drawdown so far. And as we write, the resolution to the immediate conflict is as uncertain as it was a week ago.

However, plenty of times, stocks have turned around at breadth readings around this level.

Plus, the S&P 500 is only 6% off from its all-time high. A garden-variety "correction" in the market – without a recession – requires a drop of at least 10%.

So at the very least, be prepared for some more downside ahead... before things ultimately get better.

We're not the only ones thinking this...

Today, Ten Stock Trader editor Greg Diamond recommended a pair of bearish trades on U.S. stocks to his subscribers. As he noted, "Stocks can't find a bid and 'support' is breaking across the board."

Existing Ten Stock Trader subscribers and Stansberry Alliance members can get caught up on Greg's trade updates today here, plus his look at the potential path ahead for U.S. stocks here.

Our friend Marc Chaikin – the Wall Street legend and founder of our corporate affiliate Chaikin Analytics – is also concerned right now. He has been telling his subscribers to prepare for a "bear market breakpoint."

It has to do with where we are in a proven historical cycle in the market. As Marc shared in an article for the free DailyWealth newsletter yesterday...

Folks, 2026 is a midterm-election year. It's "Year 2" of the four-year presidential cycle.

And recent history shows that the second year of the election cycle tends to be rough for investors...

In short, the stock market posted an average decline of roughly 2% during the past six "Year 2s" of the cycle. In other words, if you owned the S&P 500 in 2002, 2006, 2010, 2014, 2018, and 2022... you lost an average of about 2% in those years.

Looking further back over 17 election cycles going back to the 1950s, there's a 70% probability of a correction of 10% or greater in a midterm year. That's 12 out of those 17 cycles.

Even worse, the average intra-year drawdown in midterm election years since the 1950s is 18%.

The turmoil in the Middle East has only added to this "correction risk," Marc says.

Back in October at our annual Stansberry Research conference in Las Vegas, Marc predicted trouble in stocks this year. Sure enough, now he says the market is reaching a critical pivot point. As Marc is saying...

For months, I've warned that 2026 could be the Year of the Bear. Just days from now, the most dangerous period for stocks in recent memory will begin.

He's going to be talking about this more to a wider audience next week. On Wednesday, March 25 at 8 p.m. Eastern time, Marc is going live with a free presentation with the details. This includes his No. 1 step to protect your wealth for what he sees coming ahead.

You can register for free here.

Updating another side of the AI growth equation...

"AI: Boom or bust?" remains a question we continue to track along with the war-driven volatility in the market.

Yesterday after market close, memory-chip giant Micron Technology (MU) reported its results for the fiscal second quarter. And like other chipmakers in the AI space, Micron saw a huge boom in its business...

Revenue nearly tripled to $24 billion from the same quarter a year ago, setting a new quarterly record for the company. And Micron expects revenue to more than triple year over year to $33.5 billion in the third quarter.

The story is the same with the company's earnings. Net income surged more than 700% to $13.8 billion in the second quarter. The reason is simple... There aren't enough memory chips to fuel the high demand for AI.

Semiconductors are a critical part of the AI growth story and supply chain. And as our colleague Sean Michael Cummings explained in a DailyWealth essay in December, AI companies have rushed out to secure supplies for memory chips for their data centers.

But in doing so, they've overwhelmed the chipmakers. From Sean...

This October, OpenAI announced a partnership with Samsung and SK Hynix, the two largest memory suppliers in the world. The deal gives OpenAI access to 900,000 DRAM wafers a month over the next four years. That's up to 40% of monthly global DRAM production.

And that has pushed prices higher – fueling both sales and earnings growth for Micron. CEO Sanjay Mehrotra highlighted both strong demand and tight supply across the entire memory industry as the two driving factors for the strong quarter.

Despite the glowing report from Micron, though, the stock fell today after the release – closing down 3.8%.

Nothing from the report stood out as a red flag. But after the stock has more than quadrupled over the past 12 months, investors likely locked in some profits on their positions.

It's still up big this year, though. And unlike most of the largest stocks in the U.S. market, still up this year.

But buyer beware, says Whitney Tilson...

Regular readers recognize Whitney as the editor of our Stansberry's Investment Advisory newsletter. In the January 22 edition of his free daily e-letter, Whitney named Micron and its Korean counterpart SK Hynix (000660.KS) as two "cyclical" stocks to avoid.

Cyclical businesses' performance usually heavily depends on the economic cycle. They're especially prone to boom during expansion and bust during recessions.

As Whitney explained, Micron and SK Hynix have seen huge run-ups over the past 12 months after going almost nowhere for a decade before that. Micron has soared more than 300%, while SK Hynix shares have increased nearly 400% over the same period.

The stocks still appear cheap today. From Whitney...

But even after its huge run-up, Micron trades at only 11.7 times this year's consensus analysts' earnings estimates and 9.2 times next year's. The same figures for SK Hynix are an even lower 7 times and 5.9 times, respectively.

How is this possible? Simple: Earnings – and future earnings estimates – have risen even faster than their stock prices.

That's all well and good in boom times. And Wall Street expects that to continue as the AI growth story rolls on. So the stock still looks cheap today on an earnings basis. But Whitney warned that this could be a trap for investors looking to establish a position today, especially if you're wary about AI growth moving ahead.