Buyers are back... for now
OUTLOOK:
January 26th
The major
indexes push to new highs again on Wednesday gapping higher at the
open and drifting higher throughout the day.
The shift in sentiment
by investors towards buying and adding risk to portfolios lead the
small caps (IWM) and NASDAQ (QQQ) to new highs as well. Positive
earnings from tech and industrials set the tone early for the trading
day as both sectors posted new highs as well. Semiconductors continue
the move higher completing the cup pattern and break higher. REITs
were negative as interest rates continue to be a challenge for sector
along with money rotating to growth and away from safety. This is
what everyone has been waiting and hoping for and now is the question
of sustainability for the move. Trump actions and comments have
continued to be the catalyst this week. The hope of fulfilled
campaign promises remains the driver for investors.
Ten of the
eleven sectors ended higher for the day with financials (XLF),
industrials (XLI) and technology (XLK) leading the upside move. XLI
and XLK posted new highs with XLF at the December highs again
following some profit taking on earnings. The lone downside move came
from the RETIs (RWR). Weakness on rotation towards growth the last
couple of days, but the uptrend off the November low remains in play.
The S&P 500 index closed at 2298 up 18 points posting new highs
on the gap open. Gold (GLD) continued lower Wednesday breaking
support at the $115.17 mark and breaking the uptrend off the December
low. Watching how it unfolds near term with the renewed sentiment
from investors. The dollar was stronger putting some pressure on the
metal. The dollar index (DXY) bounced back above the 100.75 support
with a gap higher to 101.19 on Trump actions towards immigration and
building a wall on the Mexican border. Pressure has been on the
dollar (UUP) the last month as the uncertainty grows around the Fed
and Washington.
The emerging markets (EEM) jumped 1.5% Monday and
completed the double bottom pattern with a positive move and follow
through the last two days.
The Volatility Index (VIX) moved lower
again and closed the day at 10.8 and testing the 2014 lows. All
is well and 'risk on' has returned for investors...
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