July 27, 2014
Weekly Market Outlook
By Keith Schneider
The picture of the key US Indexes is a very clear mixed message. The backdrop of increased Geo-Political tensions has put a lid on just how far the already long running bull market can go. So far sideways action has trumped the bulls and the bears if you look at the combined action in all US Stock Indexes. The big question is for how long will this action persist?
Here are some details… The NASDQ 100 and the S&P 500 both made new all-time highs this week but failed to close well and barely eked out a positive weekly return. However, both their weekly trends are firmly intact.
Meanwhile, the Dow Industrials (DIA) and Russell 2000 (IWM) posted modest weekly losses. The IWM didn’t even make it close to taking out its all-time highs made just 4 weeks ago and acted very poorly. The disparity in the overall technical patterns between these indexes is cause for concern and in order to make any positive headway the small caps need to firm up. The double topping pattern in IWM along with the gaps left on Friday on the other key indexes are additional reasons to consider take some money off the table and reducing exposure.
The bright spots looking across the landscape are INTC and FB. Despite a very nasty selloff in semiconductors, INTC held on to huge gains. Facebook has proven there is real money to be made in mobile apps. This was a huge question for the future of FB as people now spend more time on mobile smartphones than on desktops. FB is now a real long term social media player and has some math behind it.
Other interesting developments this week is that the dollar rose while rates dropped to their lowest levels this year. Let’s go to this week’s video and see if we can clarify this murky picture.
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