Market Checkup: Equities Look Tired, But Optimistic
Keith Schneider | Dec 01, 2019 01:13AM ET
U.S. equities once again shrugged off added geopolitical stress with several benchmark indexes hitting new highs this week.
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New tensions appeared after Trump signed a bill supporting Hong Kong protestors. Henry Kissinger, 96, former secretary of State, relic/icon of the cold war and largely responsible for opening up trade with China is urging the U.S. to recognize that China is now equal on the world stage and avert a catastrophic war. He spoke at a conference in Beijing and said, “We are still in the foothills of a cold war.”
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On a positive note, he was optimistic that sanity will prevail, and the two countries will work out their differences. This, of course, should be good for stocks and the global economy. How he feels now is another question as that was his thoughts way back on Nov 14, before the bill was signed this week. It’s clear that Mr. Market seems content now but could have a taper tantrum anytime.
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Just looking at current pure market action, the was a big improvement in IWM (Grandpa Russel/Small Caps) this week, as it held key support and rose +2.56%.
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The other key indexes rose +1.3% on average. So, market action overall is positive, with the spec sectors such as biotech and semis leading, while utilities and energy continue to lag.
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If the market took a full physical exam right now it would also show some overbought readings with volume light, risk gauges are neutral, advance/declines ratios are showing the equities look tired with sentiment running rich.
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This week’s highlights are:
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- Risk Gauges remained stuck in neutral
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- Volume patterns are still modestly positive
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- Market Internals are showing negative readings
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- The Retail sector firmed but is still underperforming the S&P 500
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- Biotech led the rally, +4.68% on the week
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- Sentiment showing irrational exuberance
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- The Energy complex is under pressure
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