OUTLOOK: Week of February 27th
Investors push indexes higher for the week but show some signs of caution at the current highs. On Friday the sellers attempted to push stocks lower early, but by the end of the day, they all posted positive numbers. At this point, the sellers are just not engaged in the process enough to take stocks lower, and thus, the trend remains on the upside as the indexes posted new highs for the week.
Eight sectors ended higher on Friday with utilities (XLU), healthcare (XLV) and consumer discretionary (XLY) leading the day. The leaders remain more on the defensive side for the week with utilities and REITs leading. The downside was led by telecom (IYZ) as the sector continues to struggle in a trading range and closing near support. Energy (XLE) equally has struggled on the uncertainty about crude oil prices. Plenty of positive overall, but still warnings signs in the charts of several sectors. The S&P 500 index closed at 2367 and near the new highs posted during the week. Gold (GLD) continued to bounce off the test of the $115.86 level support and consolidation. The metal cleared the $118.60 resistance and is progressing towards the $120.45 target. Watching how the metal responds to the emotions going forward… adjusting my stops as it inches higher. The dollar (UUP) hit resistance after bouncing off the January low but remains on the positive side currently. The emerging markets (EEM) closed the week on a negative note but remains in an uptrend. The Volatility Index (VIX) remains unphased by all the rumors and talk in the media. However, it did show some worries about inflation and remains at the 11.4 mark. Looking for a move above the 13 mark to hold as an indicator for anxiety rising. Willing to let the optimism unfold as the markets move higher and investors determine their collective beliefs… manage your risk accordingly.