April 29, 2013
Equity Market Review
Fusion Analytics Research Partners LLC ©2013 All Rights Reserved
Markets continue to extend their bounce after a recent and shallow correction. Defensive areas such as consumer staples andutilities have continued to lead the market higher, although last week, tech and in particular, semiconductors jumped to theforefront.
Economic news still tends to be split, with some good
and some bad. CEO’s on conference calls, especially those in economically
sensitive areas of the global economy sound more cautious than bullish, however, the market continues to ignore it, right or wrong.
The key question becomes is the recent spate of cautionary economic data the start of something more grave or a mere soft patch? The market by its strength could be saying this is a soft patch. Or the market could be ignoring the recent softening, because itfeels world central bankers are on full alert, ensuring continued easing
. This assurance of available credit seems to be what issupporting risk assets. In fact, one could argue that risk assets are being aided more by central bank actions than the real economy.
Technically, trends remain up, supports have been tested and held, breadth remains intact, though weakened from earlier in thetrend and sentiment remains mixed
. Clearly as trends lengthen they don’t
remain as pretty as they were in the beginning of themove, however, the basic components though diminished, are still in place. We continue to be cognizant that the winds of seasonalchange are upon us as we enter spring and summer, however, that seems to be a wall or worry point at present more than a reality.
There is an old saying in war
that goes, “don’t shoot until you see the whites of their eyes.”
I think this rings true in equity marketsas well, meaning seeing divergences between price and momentum
is one thing, but don’t act until the trends actually give