‘Sell in May’ critics are running wild this year. Meanwhile, bearish trends are usually strong in the next six months. Historically, these months warrant caution.
Last week, the MACD line on the two of the largest and well followed US Indexes rolled over to sell signals. This ends the bullish 6-month period through April.
Macroeconomic charts say industrials will do well. China and US push limits and fears of trade wars and currency problems. Oil remains strong, as seasonality supports more large cap strength.
Seasonality has slightly moved forward this month. Will we see more weakness ahead, as this month’s gains are above average already with last week’s move from the US stimulus announcement?
A wild week for marijuana, bitcoin and ‘meme’ trading. The UK market is viewed as undervalued after Brexit.
Looking beyond 2021 economic strength, forecasts for 2022 are very positive. US cash levels remain elevated as markets hit all time highs. The USD weakens, while emerging markets strengthen and small caps come under pressure. FAAMG stocks take some of the Santa Claus Rally leadership.
The move from Growth stocks to Value names has been quick and decisive. We look at a big name tech stock to take advantage of a rotation back into growth.
US elections rule the headlines while stimulus package hopes keep the markets afloat. Goldman Sachs likes shorting the USD, but a risk off approach heading into the bullish part of the year should dwarf any currency devaluation issues.
While bonds yields are hopelessly low, managers look for yield in stocks. Seasonality is turning bullish and market breadth is increasing.
Today we look at Ruble softness along with emerging market weakness in August. Turkey’s issues are highlighted. USD strength pressures a rebound in gold. Market indicators get more bearish. September seasonality is discussed.