Global Markets Trends and Review Week Ending March 1, 2019
- Review of global markets starting with the US
- Performance chart of world markets
- Chart of China Large-Cap (FXI)
- Performance chart of major US market sectors
- Chart of Technology Sector and Russel 2000 (bell weather sector and market index to watch)
- US Markets Industry Focus
Overview To Date: The US and world markets have continued to rally from the December 2018 lows. The action over the last few weeks has been mixed at times but overall up. Still expecting some kind of pullback but the markets are doing more of a correction in place.
The summary chart below shows strength across the world markets. The US markets and world markets are all in solid intermediate uptrends. All ten world indexes intermediate-term trend are up by closing above their 200-day moving average (PPO200). A big change since late December when all trends were down. While uptrend is still up, Emerging Markets (EEM) showed some weakness last week with its 20-Day ROC (rate of change) turning negative.
Performance comparison of the major world markets to SP500: World markets worldwide along with the US markets continue in an uptrend. There was sideways action and a small pullback in some markets. The Vanguard Total World Stock ETF (VT) closed up and above its October/November highs. See the chart below after performance comparison.
China market index (FXI) Bellwether Market. Continue to watch the China market as a bellwether indicator. There was some pullback in the China index this week, the overall trend remains up. The China economy has a big impact on the world economy. A break in the China index would signal concern over the China economy. The 200-day moving average has turned up, showing positive uptrend momentum.
Relative Performance US market sectors: Since the December lows, the US market sectors have rallied. Last week saw some minor consolidation, and sideways action. Seven of the of the elven sectors were up some. Overall the results were mixed. The biggest gain was Energy up 1.05%. Next was the Technology sector up 0.99%, a growth sector. Again, no large gains, mostly sideways action as you can see in the chart below.
Technology EFT – XLK Bellwether Sector and the Russel 2000. Investors and funds continue to move money back into technology and small-cap stocks. In the chart below Technology EFT (XLK) continues strong. Small pull back in the Russel 2000. Both indicate confirmation of the breadth of the rally.
US Markets Industry Focus: US markets major sectors continue to rally. Sectors and industry groups that show the strongest relative strength (momentum) coming out of a major correction, will show the best returns and investment opportunities over the following months. Dow Jones US Software Index ($DJUSSW) has rallied from the December 2018 lows to make new all-time highs.
Summary: Since the December 24th low, the world markets have been in a strong rally. The market strength in US markets has been confirmed by strong market internals not seen since the low in 2016. Short of a major derailment, there is a good indication of continuation in 2019 of the secular bull market started in 2009. Major indices and sector continue to rally and some are making new highs.
This is an aging bull market and it will continue to be a difficult trading and investment environment. All it takes is a wrong statement on trade, the economy or from the Federal Reserve to send the markets into another selloff.
Good investment opportunities continue to develop as the US and world markets rally. These are active investors or traders markets.
For those who read the “Special Report – Example of Buy Setup on Apple (AAPL)”, Apple has continued to trade in a very narrow consolidation for another week. Here is the link to an updated chart: http://schrts.co/GvZdVvjW Apple is a large institutional holding, expecting it will break out of the range. The original report is at https://deckresearch.com/special-report-example-of-buy-setup-on-apple-aapl/
For those that follow gold, it gave its first sell signal since it broke out of a base at the October low. On Friday it was down sharply on 2X average volume.
Note: the above are not trade recommendations, but possibilities to watch. The market is volatile and can swing sharply.