All Clear….Maybe

September 8, 2019

Weekly Market Outlook

By Keith Schneider

blankVirtually all global equity markets rallied led by Mexico in the Americas, Korea and China in Asia, and Russia in Europe. The theme here is that weak performers and energy exporters found buyers. Also noteworthy is that speculative sectors and growth stocks led the rally, while shipping stocks look like a bottom is in. What was missing was confirming volume.

This actually makes sense from a global macro perspective since the global economy might have a good reason to breath a sigh of relief. The tensions in Hong Kong have a good chance of calming down and trade talks between China and the US are on track to resume sometime soon. The weak unconvincing volume is also logical as neither of these two developments are a layup.

This week’s highlights are:

  • Risk Gauges jumped to 100% bullish on light volume
  • Defensive Sectors such as Utilities and Consumer Staples ran true to bullish action and underperformed
  • Gold and Gold Miners sold off as highlighted by our Real Motion indicators last week
  • Semis (SMH), Transports (IYT) Oil Services (OIH) led the rally
  • Russell 2000 (IWM) remains a major drag, lagging other key benchmarks
  • Long Bonds (TLT) backed off its historic rise as momentum lags from new highs put in 7 days ago

On a final note for this week US Equities, even though this weeks price action was very positive we still need to clear highs set in early May on good volume to set the stage for a massive blow off.

Our Real Motion indicators have been ahead of the curve finding reversals in the parabolic moves in Bonds and Gold.

For more info on Real Motion click here

Best Wishes for your trading!

Keith Schneider


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