November 2021 – Market At a Glance

Seasonally, November begins a better period for the equity market. There is a strong possibility that it could live up to its reputation this year, and we may see a healthy year-end rally in the stocks.

The Technical Analysis informs us that major U.S. equity indices are on the verge of breaking above their previous highs. Some are coming out of bullish chart patterns and can rise by 5-10% over the next few months. Weekly new highs are trending higher, and the Advance/Decline lines are improving too.

Business Cycle and Sector Rotation

Some business sectors perform better during certain stages of an economic cycle and some during others. To take advantage of these regularly occurring business and economic fluctuations, we need to know when a sector typically outperforms and when it underperforms. The Business Cycle model tells us when an industrial sector has a greater probability of outperforming the market. The sector rotation approach guides us in taking money out of underperforming sectors and putting it into outperforming sectors.

Commodities Can Go A Lot Higher, But Not All

The Reuters/Jefferies CRB Index is a widely followed commodities index. Since its inception in 1957, the Index has been revised ten times. The last revision was in 2005 when a 4-tier grouping system replaced the system of equal weightings of its current 19 components. The new system gives Group 1 – Crude Oil, Heating Oil,…

October 2021 – Market At A Glance

September is historically the worst month for the US equity markets. According to Stock Traders Almanac, September is ranked 12th for Dow Jones Industrial Average, S&P 500, and NASDAQ Composite. It is the second-worst month for Russell 2000. Since 1950, the Dow has declined 42 times or 59% in September and the S&P 500 38…

Are We Getting Back To Normal? Seems Like It

The investor optimism is quite elevated as witnessed by the all-time high levels of major indices. Investors are buying equities and selling long-dated Treasuries – the yields on 30-year US Treasury are at the highest level since mid-January 2020 after breaking above many resistance levels. Many areas of the economy are still depressed but prominent…

Defensive Sectors and NASDAQ Are Leading The Market Higher

NASDAQ Is The Best Performing U.S. Index Before the COVID-19 induced market collapse, most major U.S. indices were making all-time highs (see Figure 1). Dow Jones Transportation Average (DJT) and S&P 500 Small Caps were two indices that reached the respective highs they made in October 2018. The February-March saw all indices sharply reach multi-year…

All That Glitters Is … Gold Again?

Gold is Shining Again Gold is on the rise. There are many fundamental factors that are favoring it. The US Dollar is soft, the Coronavirus pandemic has ignited the fears of a global economic recession and the global interest rates are low. No wonder gold is trying to reclaim its previous high levels. Technical charts…