Risk Gauges Stuck in Neutral

June 23, 2019

Weekly Market Outlook

By Keith Schneider

blankUS Equities markets ripped higher after the Fed announced it’s intention to lower rates ( coming soon to a bank near you ).US Equity benchmarks were up between +1.4%  and +3.3% depending on the poison you pick.

In fact the S & P 500 hit new all time highs and paused on Friday, putting in a inside day. Which way it breaks from here will be telling and could be setting up for bear trap or just a pause before an explosion to the upside.

Emerging markets smartly recovered the dollar got hit, while Gold and Gold miners soared. Gold put in its best performance in years, breaking out of  a six year base. The amount of negative yielding debt hit $13 trillion dollars, so the move in Gold is not surprising.

This week’s highlights are:

  • Risk Gauges are neutral which was surprising considering the strong price action
  • Volume patterns held steady and in a neutral zone
  • Gold (GLD) closed at highest levels since March 2014 with massive dollar inflows
  • US long bonds (TLT) have a momentum divergence and could be ripe for pause
  • Emerging Markets recovered and moved back to a bull phase
  • IWM, otherwise known as Grandpa Russell, continues to lag and could not close over it 50 Week Moving Average
  • The Modern family (cyclicals) improved a bit with Speculative Sister Semis (Sister Semis) leading while utilities lagged.
  • Cash levels remain very high as well as allocations to US Treasuries, a strong bullish reading for stocks

Considering that President Trump and Chairman Xi will be meeting this week at the G20 to discuss the current trade war anything is possible, and we are a tweet away from major move. It remains to be to which direction we move out of the current vortex.

Its times like this, when an experienced discretionary Global Macro trader often outperforms. They know which tools to use, plus how when to apply them. Check out Mish’s new service……. which does just that.

Best Wishes for your trading!

Keith Schneider

CEO – MarketGauge.com

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