Friday, January 25, 2019
There was a relatively flat week for stocks after an earlier drop intraweek that did see some recovery. While we are still on a Global Sell, we are seeing some advances that could turn the tide into a Global Buy, which would give us a rotational signal to change the holdings in our portfolios. Our Universe Trend Indicator has jumped off the bottom, but we are only about halfway towards seeing the changes that we would like to know that enough of the stocks tracked are switching trend from negative to positive. If we drill down into the Emerging Markets, then we are seeing a stronger reversal. While US markets were in more of a protracted selloff, the Emerging Markets saw some stronger moves and additional positive movements in January. There could be some lasting developments that would make the Emerging Markets potentially outperform the Developed Markets, but we would need further confirmation to know more surely.
The Tactical Indicators have continued to build strength and progress this week. The 10-week Indicator has held its continued increases over the past few weeks. From the Low Risk points, we have now risen to almost the 66% level. The short-term upside momentum would appear to be on track as more stocks are rising above their 50-day moving averages. We will have to see if there is some continuation buying to take us to the High Risk levels over the next several weeks or if a resistance may reverse the upswing. The Overbought/Oversold indicator has reached the Overbought level, now more than 7% above the Trend Average, and it could continue to the Highly Overbought level with positive market action. The MSCI All-Country World Index has moved above the 485 level, so it is rapidly approaching that 500-level that we have noted previously. Over the short-term, we have seen a flatter yield curve for bonds. We have seen a record outflow from stocks, so there could be a strong inflow, as many investors may not want to mistime the market movements. We are not seeing the data support a recession forming.
This week, we discuss some of the economic indicators that we have observed as well as some of the market action that has taken place around the globe. For positions and performance data, please view the Weekly Update video. If you are not yet a member of the Investor Education Institute and would like a risk-free 90-day trial, then please click on the following link and let us know that you found us through our Blog: Complimentary 90 Day Trial.
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