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The bulls and bears called it a draw after a week of another trading. Neither one of the parties was able to show dominance for the week. After the closing bell on Friday, the S&P 500 was up .02% for the week.
The Bear ‘o’ Meter stays the same for this week. Large, fairly diversified indexes, such as the S&P 500, typically don’t rise sharply in price and subsequently fall sharply in price. It is many times more of a rolling type of action. One may argue that we have started that ‘roll process.’ And they could be right, but we still have certain sectors of the S&P 500, technology, consumer discretionary (to name a couple) that are making new highs. Chances are, we’d see some topping process in these sectors before the S&P 500 is ready to give up.
The swing indexes we like are the following: Extended Treasury / Australia / EAFE Value / Global Wind Energy / Healthcare Sector / Transportation / Natural Gas / US Aerospace and Defense
Most of the indexes were up for the week. The US markets continue to outpace many international markets. Many international markets have bounced from their support, which is bullish, but as they are bouncing off of support, some of the US sectors and asset classes are making new highs. That is what makes the US markets stronger right now as they are simply outperforming on a weekly and monthly time frame.
The commodity positions are still in play. They aren’t as ‘weak’ as some of the international markets, but they are also lagging behind many other US sectors. It isn’t over for commodities, but they are starting to get into a place that could cause the bulls to give up if they stop making progress.
Again for this week we do not have any buy triggers in place. Many of the stops are quite a ways off from prices today, with the exception of the MSCI International Value Index and US Treasuries Index.
After the S&P 500 had a week similar to this, it fell for two weeks straight. This past week was neutral, but it is also a weak sell signal. If the bulls can’t get a strong start for the week, it could give some confidence to the bears. We’ll be watching to see if the S&P 500 can in fact continue this bull leg up, or if bulls are all tuckered out and need a break for the time-being.
The Education/Gratitude Book Club
This month’s book is “Do It Scared: Charge Forward With Confidence, Conquer Resistance, and Break Through Your Limitations,” by Scott Allan. We will be watching the markets closely in these interesting times. Have a great week!
Adam Straseske, CMT