From Russia With Love

October 27, 2019

Weekly Market Outlook

By Keith Schneider

blankAs markets exit from the most dicey month of the year, it is interesting to note that key US equity benchmarks are still down a bit over the last three month rolling period despite the recent surge.

Don’t get me wrong, equity markets look poised to surge into year-end, but the longer-term weekly charts are still looking heavy from a momentum perspective.

The exception to this is the three-month performance of the NASDAQ 100 which is now up +.14% during this rolling timeframe. It got a little help from the Semis which surged on great earnings from LRCX (Lam Research) and INTC (Intel).

Caveat Emptor.

Keep an eye on the emergency exits as buy and hold strategies always look best as the markets hit all-time highs.

Beware, the king of buy and hold, Warren Bugget, is taking a different approach…

Mr. Buffet is sitting on a huge pile of cash, waiting for the next serious correction to put his money to work.

Also, worth mentioning is the fact that the Russian stock index is leading global equities over the past 6 months. It is getting a boost as it takes a leading role (although a flawed character) on the world stage. Meanwhile, the US retreats.

The surge in oil markets based on both geo-political stress and an improved economic outlook, assuming you look at all the hard data and liquidity conditions.

Putin’s pivot from US bonds to gold has not hurt either.

This week’s highlights are:

  • Risk Gauges are still in full risk-on mode while NASDAQ 100 hit new all-time highs
  • Volume patterns are confirming price action for key US equity benchmarks
  • Market Internals are still positive while working off modestly overbought levels with positive action
  • Interest rates jumped this week while the yield curve reverts to normalcy
  • Semi’s reversed toppy action and exploded to new highs on excellent earnings
  • Retail, Transportation, and Oil all had a solid performance which is a big positive for equities as sector performance is showing signs of life
  • Base Metals, Gold and Silver are acting well

Best wishes for your trading,

Keith Schneider

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