May 28, 2013
Weekly Market Outlook
By Keith Schneider
This picture from a scene of one of my favorite movies featuring Nicole Kidman “Dead Calm” certainly captures the state of the markets. In the movie, Sam Neill playing Nicole’s husband, is trapped below deck in a scuttled sinking ship and has just a few moments to think clearly and work free from a near impossible situation. Right now, the shorts are in a similar situation as they have been granted a little bit of breathing room after Wednesday’s stunning reversal. They will have to make a big decision: either stay the course with hopes the ship miraculously stabilizes or cut losses right here and break free of a sinking ship.
Thursday and Friday’s action formed what could become a new base or launch pad. Plus, the S&P 500 and the Dow had inside days as well. Basically, two possible scenarios will emerge into this week. First, the base remains just that-a base to gather momentum from as all indexes are firmly in bullish phases. Second, the base becomes resistance if the market gaps lower or works its way lower right out of the gate on Tuesday. The same applies with the groups and sectors we have been friendly to all year.
Semiconductors, financials, real estate and interest rates-if they all stay firm and over last week’s lows, those are the best signs that the US once again shook off news of foreign woes, with minimal fear, sustaining its bullish sentiment.
GOLD had some meaningful compression with two inside days and merits playing the breakout on either side.
Due to this week’s holiday schedule there will be not video. But click here to follow us in our premium services and see how we are playing these most interesting setups.
Every week you'll gain actionable insight with:
