Those of you who’d prefer to see the present correction end sooner than later will like how the market at least opens this morning. Those of you who understand that corrections amid a strong overall setup are the healthiest of things might prefer that it last a bit longer and purge a few more excesses. Best I suppose to be oblivious to the short-term and simply take what we get.
As for the overall setup, our weekly macro fundamental analysis continues, as of this morning, to score quite strongly. In terms of the technicals, last week did some short-term damage: The S&P 500, as well as our largest positions, by sector, all breached their 50-day moving averages, while either bouncing off of or holding above their 200-day mas. The economically defensive sectors (single-digit or non-existent positions for us) — the stuff that typically does better when the fundamentals stink — with the exception of health care have fallen right through their 200-day mas (utilities and REITs were already there). I.e., the growthy stuff (save for energy) looks technically better than the “safer” stuff. That, by itself, speaks to the present strength of the global economy.
On top of all of the focused research exercises we perform throughout each week, we also cut and paste economic reports and additional data points into our monthly trends files. Below are the titles to our February file almost two weeks in. We feel justifiably uninspired to react in any way to the presently volatile state of global markets:
click to enlarge…
