MarketSurge powers the charts in this video.
The Nasdaq 100 (QQQ) tested its VWAP since its lows again near 438. It held it again. If it goes back under 438, we will likely see another leg lower. There is also a possibility of a higher low forming near 438.
The silver lining from last week is that we are finally seeing the market trying to find the potential winners in the new macro environment. For example, we saw a big jump in rare earth metal stocks after China curbed its exports. Stocks like MP, USAR went up between 20% and 100%. There’s always a bull market somewhere; even in the midst of an overall bear market; even if those rallies don’t last long.
Foreign financial stocks are showing notable relative strength. Indian banks broke out to new all-time highs – IBN; Argentine and European banks are back above their 50dma and setting up – GGAL, BBAR, EUFN, etc.
The energy sector also woke up last week – the reason is not an expected economic growth, but a potential escalation with Iran and other oil-rich nations that could limit supply.
Other than the above-mentioned, the industries that are currently showing relative strength have a mostly defensive nature – telecoms, consumer staples, and utilities. The market is pricing a potential slowdown in growth or even a recession.
In the meantime, the new earnings season has just begun, and so far, the market reaction has been mostly bearish. Companies are warning about missing estimates ahead of their reports. Even the ones that beat estimates are selling off or not following through because of lower guidance. At this point, the market seems more focused on tariffs and trade wars than earnings.
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