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The Momentum category rebounded 49 points last week, reflecting small gains across most of the quantitative chart scores…

Ten weeks into 2018, we have already seen three mini-cycles in U.S. equities. A rip-roaring surge in January was followed in early February by one of the shortest corrections in history...

The week-over-week decline was the result of big losses in Supply/Demand and Momentum/Breadth/Divergence categories. The Attitudinal category also lost ground.

Value can’t catch a break. Even a bounce in oil can’t jumpstart the traditionally value-oriented Energy sector. We’ve been sticking to our late bull-market thesis that Growth will outperform, but as we see signs that gains may be limited (or non-existent) going forward, a shift to Value could be in the making.

Before rallying back to a more modest loss, the index was down 11.8% from its all-time high on January 26th. Also of note was the volatility—the index moved at least 1% in 12 of the 19 trading days. The S&P 500 had only experienced three 1% daily moves in the five months prior to February.

Outperforming in up, and now, down months, Growth stocks seem to have the best of both worlds. After an ugly February, Small and Mid Cap Value stocks are now in negative territory YTD.

Despite dramatic Large Cap outperformance over the last five quarters, our Ratio of Ratios hasn’t strayed more than 4% from its long-term median Small Cap premium of 3%.

A review of Quality factors, as well as the lower valuations of High Quality stocks, supports the current High Quality cycle amid rising market volatility. The Leverage factor may provide particularly strong backing for High Quality stocks.

Our Up/Down Ratio held on to its first month gains and now sports a “two-month” reading of 1.97. We’re experiencing a quantity of firms growing YOY EPS that is unmatched by recent history.

For the first time in this bull market, defensive stocks failed to provide any semblance of defense during a market correction.

Department Stores have rallied the last four months; Health Care Distributors is one of the cheapest groups we track; Paper & Forest Products is the only Materials group in the Attractive range of the GS Scores.

The prospect of a mid-term congressional shake-up may rattle the markets in 2018. Since 1962, nine major bear market lows occurred during mid-term election years, with eight of those happening during the traditionally weak months of May through October.

Our Group Selection (GS) Scores ranked Health Care as one of the top two sectors for a majority of 2011-2015; sector relative strength soared over that period.

We somehow missed this signal in January, perhaps because we were pre-occupied with so many other signs of “climate change.”

Today’s parallels to stock, bond, and forex market action of 1987 might not be so worrisome if that’s all there was to the story.

At the risk of yelling “fire” in a crowded theater, we present a few parallels between recent action and the year leading up to the October 1987 crash.

We’ve repeatedly shown how well-telegraphed the bull market highs of 1990, 2000, and 2007 were from the perspective of breadth and leadership. Surprisingly, though, the historic high of August 1987 was not so well-anticipated by the eight market bellwethers to which we’ve lately referred.

The stock market’s nine-day decline off its January 26th high met our definition of an intermediate correction—an S&P 500 loss of between 7-12%.

Last fall’s market rally drove the DJIA off (literally) our 1900-Present Bull Market chart. Within a year, this bull jumped two spots to #3 in the all-time rankings dating back to 1900.

The setback from the January 26th market peak represents the ninth correction of 7% or more since 2009, the most ever recorded during a single cyclical bull market.