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18 May 2020 – Market surges upward on vaccine optimism

Summary (The Week Ahead)
$DJTUpTrend and in preliminary Squeeze. /YMUpTrend and in a Squeeze. /RTYUpTrend and in a preliminary Squeeze. /NQUpTrend and in a preliminary Squeeze. /ES – DownTrend and in a Squeeze.

Volatility is compressed.

/CL UpTrend. /GCUpTrend and in a Squeeze. /ZB – DownTrend and in Squeeze. HYG – UpTrend and in a Squeeze. DBC – DownTrend and in a preliminary Squeeze.

Commodities is making a move which is rather bullish for the market.

$DXYUpTrend and in a Squeeze. EUR/USDUpTrend and in a Squeeze. USD/JPYUpTrend and in a preliminary Squeeze.

Market Internals
Market Sentiment – Bullish. Put/Call ratio – 0.605. Market Breadth – sloping upward showing more gainers than losers. Volume Acc/Dis – sloping upward and showing accumulation. Vix – 29.30 and Vix Futures – 29.55. Skew – 129.23.

The Squeezes in the indices are indicating that a big move is coming up.

Bond market traded upward. Gold is now back above US$1700 but has pulled back as the indices surged. Market Internals are indicating bearishness. HYG which is the ETF for high yield bonds is trading sideways with bearish bias. The prognosis is that the market is turning downward.

Relative Strength – Sectors.

On a 3-monthly lookback, the relative strength order of the S&P ETF 500 sectors are XLY, XLE, SPX, XLK, SPY, /ES, XLB, XLV, XLP, XLI, XLF and XLU.

On a 12-monthly lookback, the relative strength order of the S&P 500 ETFs are XLV, XLK, XLY, XLB, SPY, SPX, /ES, XLP, XLU, XLI, XLE and XLF.  


To Your Wealth!
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