The stock market had its worst week since 2008, as the S&P 500 fell 11.5% while the Dow Jones Index fell 12.4%, The market had its first wakeup call regarding the impact of the Coronavirus on the global economy and overreacted as only inflated market can.
The reaction to the news was swift and violent , it was not a correction or any other soft definition, investors portfolio lost trillions in a week. Our forecasting models worked extra hours this week to define a strategy that could regain some of the losses to the long side portfolio,and so the next line is 2800 – 2850 for the S&P500, if that area is crossed down then the next leg might be another strong down move, on the other hand crossing the 3000 -3020 area would signal that most of the selling is behind us.
AlphaOverBeta Next Week Forecast
As the market took a strong hit, it’s important to know that we are out of most of our long positions, most of the gain comes from our PUT and short positions, see above for technical levels that may guide our future decisions.
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 which lead the market with positive momentum, have a slightly negative momentum and took the lesser hit, we continue to iterate this for weeks, these are the leading sectors of the bull run and are forecasted to continue to do so.
The oil and gas sector is suffering from negative momentum for a long time and are in a short position in our commodities portfolio.
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, there has been a lot of talk about the downturn in GLD, this is just a correction to the general uptrend and should be regarded as such.
AlphaOverBeta in Currencies
The dollar USDU and the Japanese Yen are on an uptrend, the dollar has corrected a nice move up and the FXY spiked up, both two different moves but are forecasted to continue to move up.
The Australian dollar had issued a short trigger in our currency portfolio, so did CEW which broker significant resistance levels.