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On That Divergence Between US and Global Markets

  • Written by Syndicated Publisher No Comments Comments
    December 13, 2013

    The US market has been down for two days, and down 7 of the last 9 days. But thanks to the big rally Friday in response to the employment report and small follow-through on Monday, the S&P 500 is only down 1.6% from last Friday’s new record high, with no short-term support levels broken.

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    By comparison global markets outside of the U.S. are at two-month lows on average, and their corrections have not found support at either the 50-day moving averages or trendline. In fact, unlike the U.S. market, most did not recover all the way back to their May peaks before topping out at a lower high, let alone going on to higher highs.

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    And yet, their decline from the May peak was also triggered by the Fed’s hints back them that it might begin tapering back stimulus as early as its June FOMC meeting.

    And their up and down volatility since was also triggered each time, as was the U.S. market’s, by reaction to the Fed’s taper-on, taper-off, taper-on indications.

    But U.S. investors are still very bullish. Even the short-term volatile AAII investor sentiment was not disturbed much by the market’s 7 of 9 down days. Last night’s weekly reading showed bullishness declined only 1.4 to 41.3% and bearishness actually declined more, to 25.0% from 27.5%.

    Odd that investors in countries outside of the U.S. are more worried about U.S. tapering than investors in the U.S.?

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    By the way:

    Speaking of our forecasts, the new issue of Timer Digest reports:

    “Several of the forecasts from our universe of subscribers were noteworthy for their accuracy. For the 1st Qtr 2013, the Dow closed at 14,578.54. There were 5 First Quarter forecasts
    of between DJIA 14,000 and 14,400; specifically from William Ferree, Sy Harding, Stan Harley, Bernie Schaeffer, and Dan Sullivan.”

    To read my weekend newspaper column click here:  Will The Real Economy Please Stand Up-

    Subscribers to Street Smart Report: NOTE: There is a hotline, and an in-depth ‘Mid-Week Markets Update’ from last evening, and a ‘Global Markets Update’ from Tuesday, in your secure area of Street Smart Report.com.

    And the next issue of the newsletter will be out on Wednesday of next week (the 18th), a week early, since the regular schedule would have landed it on Christmas Day.

    Images: Flickr (licence attribution)

    About The Author – Sy Harding, Street Smart Report

    Sy Harding publishes the financial website Street Smart Report Online and a free daily Internet blog at Sy’s Free Blog. In 1999 he authored Riding The Bear – How To Prosper In the Coming Bear Market. His latest book is Beat the Market the Easy Way! – Proven Seasonal Strategies Double Market’s Performance!

    It includes our research and analysis on the economy and markets, and provides charts and buy and sell signals on the major market indexes, sectors, bonds, gold, individual stocks and etf’s, including short-sales and ‘inverse’ etf’s.

    It provides two model portfolios as guides. One is based on ourSeasonal Timing Strategy, one on our Market-Timing Strategy.

    In depth updates are provided every Wednesday, with interim ‘hotline’ updates every time we make a trade. An 8-page traditional newsletter Street Smart Report is provided on the website every 3 weeks, in pdf format for viewing or printing out.

    There is the Street Smart School of online technical analysis ‘seminars’,commentaries to keep you ‘street smart’ about Wall Street, and much more. 

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