Reviewing this week’s sell off in gold and US government bonds, we notice new investor attention on small cap stocks with IWM outperforming the tech laden NASDAQ and S&P 500 indexes.
Mercado Libre (MELI) traded down after it posted excellent Q2 results – a case of ‘buy the rumor, sell the news’ and using strength to lighten up on heavily bought ‘stay at home’ companies. This is another sign of market rotation from growth to value stocks that could play out these next few weeks or months as the US heads into election uncertainty in a COVID environment.
Discussions next week could be more bearish if market signals change, but right now most market signals are still overly bought and in a bullish state.