February 20, 2016
Weekly Market Outlook
By Keith Schneider
Last week we left for the long weekend feeling a dead cat bounce of about 4-5% was in order and as things played out, the cat has indeed bounced and is currently suspended mid-air with the S&P 500 up +2.89% for the week.
Unfortunately, as you’ll discover in this week’s video, it’s unclear just how much more bounce this feline has left in it, because...
Delving a little deeper, the volume pattern still shows distribution and declining on this rally. Long term long term momentum has cracked and despite the current rally, a downward gravitational force is lurking.
With that said, we could still have a sharp move up much like we did after the August 2015 swoon, and the upcoming price action after the last two days of pause should tell us if the rally has more legs.
Ray Dalio head of the Bridgewater, the largest hedge fund feels that valuations are high, global growth weak, and therefore, returns will be muted with increased volatility.
As the world’s Central Banks scramble to spur growth and with short term rates already at zero or negative there is clearly an issue. There is not much ammo left.
On the intangibles... The comedy show we call the presidential election is not confidence inspiring either.
This week we got together with a good friend who had just came back from a trek high in the Andes with Shamans (and no Wi-Fi or Verizon coverage), but somehow all they wanted to know more about was Donald Trump!
Even with this week’s sizable rally in Equities, Bonds, Gold and the Miners gave back very little and have interesting short term patterns. This suggests that there is more behind the recent rally then many would care to believe.
Every week you'll gain actionable insight with:
