July 5, 2020
Weekly Market Outlook
By Keith Schneider
The NASDAQ 100 (QQQ) closed the week at new all-time highs, +1.65%, while the Dow Industrials (DIA) was down -.2%. In fact, YTD, the Dow is down -9.36% while the Nasdaq 100 is up 18.62%, certainly a tale of two markets. Of course, the Fed stepped up its intervention yet again after last weeks attempt to sell off. Stepping back and looking at the big themes with half the year in the rear-view mirror is that the Fed will now do anything to keep any asset class up if deemed necessary by the powers that be. One thing that seems to be running on it own fuel is Clean energy and that is glowing despite the terrible performance of fossil fuels, even with support Fed. This theme is certainly counter intuitive and a divergence from the classic price patterns.
The fed’s balance sheet is out of control, has tripled since the beginning of the year and at historic levels. This leaves the dollar very vulnerable longer term. We could wake up one morning and find out that there are weak bids on US Treasuries and a dollar that it is not worth the paper it is printed on. So, it is not surprising that Gold Miners is a leading sector on our trip to Stagflation.
This week’s highlights are:
Momentum often precedes price and one of the key themes underway is that our proprietary momo indicator is showing some divergences and overbought readings on leading sectors. For more about Marketgauge’ s proprietary real Motion Indicator press here
Happy July 4 and stay safe.
CEO - Marketgauge.com