All major U.S. stock indices except the small-cap Russell 2000 posted a slight weekly gain. Despite last week's poor showing, the Russell 2000 is actually leading the market higher this year, up 8.3% versus 6.9% for the benchmark S&P 500.

The week's best-performing sectors were financials, which have benefitted from the recent rebound in long-term interest rates, and energy, thanks to oil's rally from major underlying support near $41.

While I remain positive on the stock market between now and early next year, my research continues to warn that near-term downside risk exceeds upside potential.