Author: Gary Harloff
Covestor model: Opportunistic ETF
Our analysis indicates that style-box funds, sector indices, and world indexes are recovering and are now generally buys. The market recovery may be tepid since the U.S. is a slow “but” growing economy. The high frequency, very highly volatile market the U.S. experienced during the 4th quarter is over, as indicated by the narrower volatility bands as observed in our S&P500 band. With volatility at more reasonable levels, the market is no longer chaotic.
Last month, we had new buy signals for S&P 500 (SPX), Nasdaq 100 (NDX), Gold, and a sell signal for U.S. bonds. We continue to have buys on S&P500, NDX100, and gold. And we continue to have a sell on bonds.
According to our analysis, the highest performing sectors going forward should be: telecommunication, banks, technology, large-cap European stocks, finance, and semiconductors.
The bigger geopolitical issues are: deleveraging of debt by governments and people, proprietary trading by large banks, and GDP growth. This editor feels the problems we are facing are a consequence of years of corporate officers (MBA’s) over-reach for quarterly profits, ignoring homegrown manufacturing and technology capability, and greed for themselves. Companies have the money to invest in the U.S. and should soon – sometime in our lifetime.
Because the markets can turn quickly, be ready. May the market be with you (June 22, 2012)!
