The S&P500 index was up +3.2% last week and closed at 3227, mostly due to Coronavirus fears removed, President Trump acquittal from impeachment and no surprise in earning reports, this goes along the line that we have played for the past few weeks and months – the buy the dip mindset is ruling the traders in wall street and the retail trader should follow that tone in order to ride the swing wave until there will be a major catalyst for a downturn, which we promise to report in case we forecast one.
Alpha Over Beta Next Week Forecast
As for our forecasting models go, we continue to be bullish on the US economy and stock market, as the last few months really is supported by strong hands joining the upswing late infusing large capital into the market in the form of mutual funds, they wish to outperform the market after single-digit returns in 2019, which we believe will fuel this rally at least until 3-4 month before the election.
AlphaOverBeta sectors ranking
As usual, we are looking for sectors that are picking up on momentum.
The Utility sector and the Pharmaceuticals sector continue to lead this market, joined by the tech sector which we have predicted would pick up the pace, our forecasting models outweigh the technology sector for the next 12 months, the FAANG is a major stake of our current portfolio. On the flip side, Oil and gas sector and their related sectors are the weakest and have been so for the past few weeks, we are waiting for XES to break below 650 and then we would move in with short positions.
Specific stocks in these sectors may be found in our detailed alerts and stock picks service
AlphaOverBeta in Metals
Palladium and Gold lead the metals with strong momentum and are forecasted to continue to do so in the next few weeks, on the short side Copper is the weakest metal in the domain and should be reduced in size, we wouldn’t recommend shorting right now as copper is very oversold, we wait for CPER to cross below 15$ to enter short positions.
AlphaOverBeta in Currencies
Pay attention to the dollars recovery move, this is a highly explosive move, crossing the 27$ level would significantly trigger a bullish move for the longer term. On the flip side, the Australian dollar (FXA) just crossed the 67$ level and is a short position.
Alpha Over Beta Trades