The S&P500 index was down 1.3% last week and closed at 3380.16, as fears of the coronavirus spreading into other countries and affecting companies bottom line started to hit the market. AAPL reported earnings with a warning due to the coronavirus slowing activity in China. Overall the market was overbought and ready for a correction, despite economic data that supported a growing US economy.
AlphaOverBeta Next Week Forecast
As for our forecasting models go, we continue to be bullish on the US economy and stock market, fundamentally and technically there are no causes for alarm in the short term, our long model portfolios are bullish and point to a bullish market, the recent correction is a chance to pick up assets in favorable prices with tight hedge positions.
Our model portfolios are open for subscribers to AlphaOverBeta.net
Below you may find our leading and lagging sectors.
As usual, we are looking for sectors that are picking up on momentum.
Utilities and the technology sectors continue to lead the market with positive momentum, though reduced in the short term, as these sectors lead the market in the past few weeks, we forecast that they will continue to do so in the future, this correction is an opportunity to get the best of the sectors in cheaper prices.
The oil and gas sector is suffering from negative momentum for a long time but is not a short candidate yet, we are still in waiting mode for the sector to heavily underperform for it to be a short candidate.
Specific stocks in these sectors may be found in our detailed alerts and stock picks service
AlphaOverBeta in Metals
Palladium and Gold continue to lead the metals with strong momentum and are forecasted to continue to do so in the next few weeks.
AlphaOverBeta in Currencies
Pay attention to the dollars recovery move, we repeat our statement that crossing the 27$ level would significantly trigger a bullish move for the longer term.
The Australian dollar just issued a short trigger in our currency portfolio, so did CEW which broker significant resistance levels.