Mark Newton, head of technical strategy at Fundstrat—founded by Tom Lee—stated that he continues “buying dips” in the stock market, citing corporate earnings strength and economic conditions comparable to the mid-1990s.
Mid-1990s Parallel and Economic Backdrop
Newton said that equity markets remain in a “golden age, honestly,” driven by a “Goldilocks type economy” and a strong earnings picture.
Despite investor concerns regarding inflation, geopolitical conflicts, and a K-shaped recovery, Newton noted that none of these factors have served to derail the market trajectory.
He added that the primary change in market conditions since early in the year has been an increase in energy prices rather than fundamental economic decline.
AI Sentiment and Sector Risks
Addressing narrative shifts surrounding the technology sector, Newton described reports of an AI slowdown as a “sensationalist type headline.” He described AI technology as a “force for good” and argued that the U.S. cannot afford to let China make faster inroads.
Newton added that public commentary highlighting “doomsday type scenarios” by tech leaders, such as Anthropic CEO Dario Amodei, serves to hurt company valuations.
However, Newton issued a technical warning on energy refiners, stating that their monthly Relative Strength Index (RSI) readings are “well into their 80s” and “very, very overbought.” Here’s a list of some exchange-traded funds that track energy refiners.
| Energy Refiner ETFs | 6-Month Performance | YTD Performance | 1-Year |
| VanEck Oil Refiners ETF (NYSE:CRAK) | 34.88% | 70.74% | 73.66% |
| Vanguard Energy Index Fund ETF (NYSE:VDE) | 3.14% | 38.01% | 37.72% |
| Fidelity MSCI Energy Index ETF (NYSE:FENY) | 3.77% | 38.04% | 39.05% |
| Energy Select Sector SPDR Fund (NYSE:XLE) | 4.59% | 39.05% | 39.87% |
Technical Framework and Indicator Ranking
Outlining his market framework, Newton explained that price action remains the primary metric of his analysis, with a focus on identifying stocks breaking out to new all-time highs.
In a blind ranking of technical indicators, Newton placed the RSI first, emphasizing its utility in spotting “divergences” at market peaks and bottoms rather than relying solely on overbought levels. He ranked Moving Average Convergence Divergence (MACD) second, Simple Moving Averages (SMAs) third, and Volume Weighted Average Price (VWAP) fourth.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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