Weekly Investment Conclusion:
Strength in US equity markets last week triggered by surprising strength in economic indicators was unexpected. US equity markets quickly regained short term momentum. Positive psychology related to the Dow Industrials reaching all-time highs also helped. This week, economic data is expected to be positive again and the S&P 500 Index (a more significant US equity index) will have a chance of reaching its all-time high at 1,576.09, despite short and intermediate technical indicators once again have returned to overbought levels.
Selected sectors with favorable seasonality at this time of year remain attractive purchases candidates on weakness. The trigger could be a rollover of the US$ from a highly overbought level. When it happens, and we do think this will happen within days, commodity stocks including metals & mining, energy, coal and steel stocks will come alive. All recorded exceptional gains on Thursday and Friday.