Back for another week of market puppetry and excitement (or we hope). I will touch on the week that was in Australia, but there was really not all that much positive from a macro sense both here and overseas.
But like the stoic adventurer, markets continued to try to push forward, though the the question has to be asked, “When will the head winds become too much?”
Before we commence this week’s report, as an FYI this Momentum Monday report has three sections:
Broader market sentiment
Stocks of Interest
52 week high screen
Broader Market Sentiment week ended 17th Feb
S&P500
For all the drama filled headlines, the S&P500 hardly moved again this week.
S&P500 Weekly Chart
Sure it was the second down week in a row, but it was only by a whisker's width, and pleasingly we are still some distance from the prior downward channel.
The headlines continue to remind us that we should be worried about the US economy and how the market will hold up in the face of expected rate rises. Especially as there appears to be no end insight as the US economy is a long way away from their own 2% inflation target, given the Labor Department said the producer price index rose 0.7% last month, higher than expectations.
Reporting season will continue in the US with the most notable in my mind being Walmart. More for the strength of the US consumer rather than anything business related. The commentary there may govern short term sentiment for a while because we know that more rate rises are coming. However if their economy is going to rise through that the US consumer must continue to spend. At least we know they are employed as evidenced by the jobs figures last week.
Back to the chart. Despite the two down weeks, RSI remains above 50, and though the gap between the lines on the MACD have come closer together, the bar is still positive. So if ever you were going to have two consecutive down weeks, these are the type of indicators you want them to occur in.
But just to state the obvious, that would change if the index kept…
