MARKET OUTLOOK, 17 FEBRUARY 2020
The S&P500 index was up 1.6% last week and closed at 3380.16, this week the coronavirus did not influence the markets much and all news regarding the virus did not move traders to the bullish side.
We have reported this phenomenon in a previous report about the virus and its future impact on most investors
AlphaOverBeta Next Week Forecast
As for our forecasting models go, we continue to be bullish on the US economy and stock market, our momentum and breakout portfolios are mostly biased to the long side, we rarely make short side bets on this market until seeing some real evidence that investors are running for the exits.
Below you may find our leading and lagging sectors.
As usual, we are looking for sectors that are picking up on momentum.
Pay attention to the Tech sector, it’s on a run and is taking the market to new highs, the FAANG is the motor of the latest run and will continue to do so in the coming days. So as the Utility sector and the Software sector (technology again)
On the flip side, Oil and gas sector and their related sectors are the weakest and have been so for the past few weeks, we are waiting for XES to break below 6.50 and then we would move in with short positions.
Specific stocks in these sectors may be found in our detailed alerts and stock picks service
AlphaOverBeta in Metals
Palladium and Gold lead the metals with strong momentum and are forecasted to continue to do so in the next few weeks, on the short side Copper is the weakest metal in the domain and should be reduced in size, we wouldn’t recommend shorting right now as copper is very oversold, we wait for CPER to cross below 15$ to enter short positions.
AlphaOverBeta in Currencies
Pay attention to the dollars recovery move, this is a highly explosive move, crossing the 27$ level would significantly trigger a bullish move for the longer term. On the flip side, the Swedish Krona is on a bearish move to the downside, our currency portfolio has sold the Krona short all the way down to 93$.
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