On the cusp of a new high, the action within the technology sector provides more questions than answers. Among them – net new highs on the NASDAQ are punk, semis are acting heavy, small caps are weaker and momentum in F.A.A.N.G. is waning. On the flip side, the bullish momentum in Software and IT Services (particularly FinTech) is relentless, providing some of the strongest uptrends in the broader market. We continue to embrace the strength of the latter, but given the cracks in the sector’s underlying foundation, it bears watching whether they are immune and can ignore these growing divergences.
Search Coverage List, Models & Reports
Search Results1-10 out of 286
By moving above $1400 gold has completed a Brobdingnagian BASE that extends back to the spring of 2013 and our technical work suggests that gold will work importantly higher. In fact, it’s our estimate that gold will make a new all-time high in this cycle. Central bank tomfoolery is likely the “aboost” (if you’ve been to an Italian wedding, you’ll know what this mean) that got gold out of its range but another plus for the metal is the weakening US$ picture. For example, in our Technical Scoring System we now find that 22 of 30 pairs have soft Technical Scores and only 8 have high Technical Scores. This inverse relationship between the US$ and gold is one we explored going back to the late 1960s.
Global indices have experienced a healthy improvement over the past week, with 74% now positive in our work, up from just 42% a month ago (thank you Central Banks!). Today’s note takes a look at the multi-year trends for each…some light reading as you enjoy your morning coffee.
As the Fed helps to push the S&P 500 to new highs, their dovish turn is impacting a multitude of assets globally.
We can’t recall a more eagerly awaited Fed meeting than today’s, and regardless of the outcome something still doesn’t feel right with small caps. The chart below does a pretty good job of highlighting the headwinds that small cap investors have faced over the past year. Of the 9 sectors, only 2 are in positive territory over the past 12-months and one of them is tech which is up a meager 40 basis points. The runaway leader over this period? Utilities up 10.4%, dramatically outperforming the broader index by nearly 1900 bps over this period. Are strong markets dominated by Utes? The charts in today’s note, both at the index and sector level (pages 6-8) speak for themselves and one must once again question what is gnawing at them.
European Pharma stocks score highly on our Technical Scoring System as 15 of 21 stocks (71%) score well (3’s & 4’s). Please recall that our Technical Scoring System is based on a 0 – 4 scale with 0’s & 1’s as poor / weak, 2’s as neutral, and 3’s & 4’s as good / strong.
For example, in our Technical Scoring System the index gets a 1 (scale 0 – 5; 0’s & 1’s = poor / weak, 2’s = neutral; 3’s & 4’s = firm / strong). Other Asian equity indexes with equally poor Technical Scores include the Hang Seng China Enterprises Index and the Shenzhen SE. The Nikkei and the Topix have Technical Scores of 1 and 0, respectively.
- 1 of 29
- next →