We're Bullish On Utilities, Consumer Products And Japan
This year the equity markets have been off to a good start with S&P 500 Index (SPX) up 8% through March 7. Our January newsletter indicated a topping market in four to six weeks and we appear to be there now.
We like consumer products, utility, and Japan stocks at this time. We have new “out” or money market signals for the S&P 500 and Nasdaq 100 Index
(NDX). We are still staying out of gold and bonds. Our analysis indicates that all
style-box indexes havesmall positive momentum. All sectors have small positive
momentum except that gold momentum is negative.
For the world indexes with small positive price momentum: U.S. dollar, London and S&P 500 indices are the strongest, according to our analysis. In addition, the emerging markets and Germany have negative momentum at this time in our opinion.
U.S. stocks and emerging markets sold out in late February, but bonds did not rise. We are inclined to believe this means that the large hedge funds and NY banks shorted emerging markets.Short investors apparently do not have enough horsepower to succeed for more than a few days because the U.S. markets have since recovered. This market action may mean the U.S. market is going into a “rest mode” or possibly a small correction before going higher in a few weeks. Because the markets can turn quickly, be ready. May the market be with you!
Covestor Ltd. is a registered investment advisor. Covestor licenses investment strategies from its Model Managers to establish investment models. The commentary here is provided as general and impersonal information and should not be construed as recommendations or advice. Information from Model Managers and third-party sources deemed to be reliable but not guaranteed. Past performance is no guarantee of future results. Transaction histories for Covestor models available upon request. Additional important disclosures available at http://site.covestor.com/help/disclosures. For information about Covestor and its services, go to http://covestor.com or contact Covestor Client Services at (866) 825-3005, x703.
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