Weekly Perspectives August 23, 2020 – Weekly Perspectives: Enjoy The Bull Market

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Weekly Perspectives August 23, 2020 – Weekly Perspectives:  Enjoy The Bull Market

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Here is your weekly newsletter — perspectives on trading and financial markets.

Click here for the previous edition.

 

Enjoy the bull market 

Hope you had a good trading week.

While the summer may be winding down this past week the markets were doing anything but.

In what is usually a slow or seasonally a negative month for the markets, this past week the SPY shrugged off the summer doldrums and joined the QQQ’s in making fresh all-time highs.

Q1’s sell-off is now but a distant memory and we have just witnessed one of the fastest bear markets in market history.

In this week’s video I discuss:

  • The all-time highs in the SPY and QQQ’s and why the DIA is right around the corner
  • TSLA breaking the 2000 mark and AAPL reaching $2 trillion in market cap and the upcoming stock splits
  • The ongoing sector rotation and the concentration into high beta tech names – FNGU
  • The market reaction from this week’s jobless claims # and why bad news is still good for the market
  • The negative divergence between the underlying stocks in the S&P and the S&P index
  • What I’ll be looking for in the new month that a larger reversal may be setting up


Now watch this week’s Weekly Outlook video to see the setups and levels we’ll be watching as well as the technical outlook for the VXX SPY QQQ IWM DIA EEM TSX TLT GLD MGC BTCUSD EEM and more for the week of Weekly Market Outlook For August 24 – 28, 2020.

 

Say goodbye to the shortest bear market in S&P 500 history

Here’s a visual to put the recent bear market into some perspective.

Interestingly does the knowing of previous bear markets hinder or help you in the next bear market?



 

 

A negative divergence worth paying attention to

As I mention in this week’s Market Outlook video we are beginning to see the price of the SPY diverge from its underlying components.

On Friday, the S&P 500 made a new all-time high. However, of the 500 members in the index, just 6% were concurrently making 52-week highs.

Source:  Michael Batnik

Similarly, if we look at the SPY we saw fewer and fewer of the underlying stocks trading above their 50 day MA while the SPY made fresh all-time highs.

At some point, the S&P500 will have difficulty continuing its upside ascent if we don’t see additional participation however this is not a pronouncement to get short.  

As always wait for price to confirm.  

Remember they don’t give out gold stars for those who call tops or bottoms. ⭐

 

Gold, Bitcoin & Markets

Gold and Bitcoin have seemingly found some common ground and the recent correlations seem to indicate that investors and traders have come to a consensus of their respective hedges to the US dollar.  


Here’s a long piece from Investor Amnesia on the historical relationship between gold and the markets and how cryptocurrencies fit into the mix. 

 

Stay strong, and happy trading!

Houston

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PPS – Don’t forget to join us on our Facebook Group and exchange trading ideas between meet-ups – https://www.facebook.com/groups/montrealtraders/

 

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Weekly Perspectives August 23, 2020 – Weekly Perspectives: Enjoy The Bull Market

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