The United States economy is full of innovation. It has to be. Manufacturing industries that dominated the economy decades ago - textiles, televisions, even automobiles to a large degree - have moved overseas, where labor and materials costs are lower. Yet the U.S. economy, even during the pandemic and the recent period of high inflation, has expanded to record levels. If U.S. corporations weren't innovating, creating new products (such as AI and vaccines) and services (such as Zoom calls and Netflix), as well as moving into new markets (clean energy, rare drugs), the domestic economy would not be growing, and capital would not be flooding into the country. Consider that U.S. GDP was approximately $1 trillion in 1930 but was almost $30 trillion at the end of 2024. That's growth of 30-times. Meanwhile, the U.S. population has grown less than 3-times during that time span, to 340 million from 120 million. The delta between GDP growth and population growth has been driven, in large part, by innovation.

The indices took a break on Tuesday after the recent nice snapback rally, and some of the biggest gainers were stocks that have been very poor performers over the intermediate and longer terms. Rotation is alive and is a major contributor to the longevity of any bull market. As long as the money stays in the market, things have a way of balancing out. But when sellers do not rotate funds (and raise cash instead) problems often follow. So far, it appears that some of the recently beaten-up stocks are experiencing nice demand, with some even seeing steady call option buying. Heavy bullish option activity is associated with institutions and hedge funds seeing value. Over the past week and during the days since the major indices bottomed on March 13, the biggest S&P 500 (SPX) gainers have been TSLA (+27%), PLTR (+15%), BA (+13%), UAL, RCL, and AMD (all up 11%), DRI (+10%), JBL and APH (up 9%), and NRG, IP, COF, GM, FCX, APO, ULTA, and CEG (all up 8%). Some of these stocks were hammered over the past month or two, others have been terrible long-term performers, and a few can be considered market leaders. Also of note, the stocks come from seven different SPX sectors and from diverse industries. The weakest SPX issues over the past week also come from many sectors, but are more concentrated in the Healthcare sector. The drug and biotech stocks were particularly weak Tuesday on tariff news. The worst weekly SPX performers include NKE (-9%), CRL (-8%), MRK, UPS, MU, LVS, and LYB (all down 7%), and ABBV, INTC, DOW, IT, and LMT (all off 6%). (Mark Arbeter, CMT)

The iShares 20+ Year Treasury Bond ETF (TLT) remains in a bear channel off the peaks since September. On Wednesday, TLT gapped higher after the CPI report, with above-average volume. Daily momentum has been in oversold territory for a big part of the past three months. The first key upside level to overcome is at $87.50, the lows from April 2024. The next piece of chart resistance lies at $89.50, the September lows. On the downside, a break of the recent lows at $85 opens the door for an important test of the lows from October 2023. Market sentiment from the two- to 10-year remains bearish, fund flows have been negative but not heavy enough to be bullish and signal panic, and the Commitment of Traders (COT) data is less bullish. Still, when the COT data got less bullish in April through June 2024, bond prices rallied. The iShares Silver Trust (SLV) completed a small head-and-shoulders pattern on December 18, but saw little downside follow-through (a positive sign). It's possible that the formation since the peak on October 22 was a bullish, three-wave, ABC decline. SLV has rallied above the low from late November, creating a bullish false breakdown. In addition, the ETF has busted above the bearish trendline off the October peaks -- but not by a lot. Fibonacci retracement levels come in at $28.30, $29, and $29.70, while chart resistance is between $29 and $29.50. The lows down near $26 are short-term support. Meanwhile, the COT data remains bearish for GLD (SPDR Gold Shares), but has improved for SLV. Some sentiment data is quite bearish, while other indicators are neutral. Seasonality is much better in the beginning of the year. (Mark Arbeter, CMT)

OSI SYSTEMS INC has an Investment Rating of HOLD; a target price of $166.000000; an Industry Subrating of High; a Management Subrating of Medium; a Safety Subrating of Medium; a Financial Strength Subrating of Medium; a Growth Subrating of Medium; and a Value Subrating of Medium.