A bi-polar world
There is much talk in the media of a multipolar world, with the split between the West and the BRICS, led by China & Russia. That may be relevant in the long-term but the immediate challenge for investors is a bi-polar world, where some markets are rallying strongly while others are collapsing. Even within the US market, we have some sectors rallying while others are collapsing.
The S&P 500 is still in a bear market but the index has rallied to test resistance between 4200 and 4300. Breakout would confirm the bull signal from 250-day Rate of Change crossing to above zero.
The big 5 technology stocks — Apple, Amazon, Alphabet (GOOGL), Meta Platforms, and Microsoft — have all rallied strongly since the start of 2023.
Volatility is elevated but declining peaks on Twiggs Volatility (21-day) suggest that this is easing.
However, the rally is concentrated in big tech stocks, with small caps struggling to hold above support...
Quote for the Week
You only find out who is swimming naked when the tide goes out.
~ Warren Buffet, 2001 Chairman's Letter to Shareholders
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Colin Twiggs is director of The Patient Investor Pty Ltd, an Authorised Representative (no. 1256439) of MoneySherpa Pty Limited which holds Australian Financial Services Licence No. 451289.
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