Flashback to the 70’s

September 22, 2019

Weekly Market Outlook

By Keith Schneider

blankGlobal equity markets had a moment of self doubt and most country ETFs backed off after digesting lower rates in the US. The thinking behind the tepid market response actually had some logic to it as the Fed stated they were  concerned about an economic slowdown. Bullish  players that were anticipating  a de-escalation in the trade war were shocked on Friday as talks between China and the US were cut short, and longs bailed.  One exception to the sell off was the jump in Canadian stocks which closed up 1% for the week. Canada benefited from the jump in oil  while ignoring Justin’s blackface scandal.

We ( Don’t) Work cancelled its IPO and that had an unexpected trickle down effect. Rumour has it that We Worker’s tenants are canceling their leases and not ordering up Beyond Meat burgers that would normally be delivered by Uber Eats. Furthermore, this trickled down to the Value/Momentum narrative with Value stocks looking poised to add onto recent gains.

This week’s highlights are:

  • Risk Gauges retreated although still positive
  • Solar Stocks (TAN) were the strongest industry group +8.6%
  • Biotech (IBB) bucked the downside action and held long term moving averages
  • The S&P 500 twice touched all-time highs this week and could not follow through
  • All key US stock indexes closed under their 10 day moving averages on good volume.
  • Value stocks look poised to regain strength verses growth
  • Utlilities outperformed the benchmark S&P500 and the ratio moved to risk off
  • Gold and Gold Miners regained leadership
  • Long Bonds (TLT) regained its bullish phase
  • Consumer Discretionary (XLY) backed off a risk off indicator

Another highlight of the week is the deterioration in Market Internals and Sentiment which I will cover in this week’s premium video. Considering all the cross currents, adding expert discretionary trading to your mix is timely and here is the link.

Best Wishes for your trading!

Keith Schneider

CEO – MarketGauge.com

Leave a Comment or Reply

Your email address will not be published. Required fields are marked *