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Weekly Report
The weekly report is published on Fridays to all newsletter subscribers. The report comprises of three articles which will provide you with our analysis of the markets. The report also includes three trade recommendations picked by our Research Team. This report is available for free to non-Blue Index clients, all you need to do is create a Member account in order to receive this report directly to your inbox every week.
Christmas rally is in flight
We said we were feeling bullish for the first time in a month or so last week, and the rallies since in the US and UK have pleasantly exceeded our expectations.
US interest rates bring turnaround
Last week, we pointed out the various arguments as to whether we were beginning a new bear market, having seen a Dow Theory sell signal and acceptance below the 200 day moving average, or if we were due a rally. The bulls pointed to reasonable valuations, but more importantly ‘smart money’ short sales had dropped to a new low, with small traders, who are usually wrong, heavily short in the US.
More volatility in the markets
After last week’s sign of a rebound in markets, the downtrend resumed and has accelerated in recent days as US economic indicators begin to point towards a slowdown.
Where next for the US markets?
Wednesday’s statement from the Fed came and went with the usual equity rally after the report was released, but as we write we are seeing a fall in the US, and the immediate question is whether or not the Dow Jones has got the legs to push into high ground after a good performance in recent weeks. The tone of the Fed report was undoubtedly cautious and calculated to reassure to some extent by stating that inflation risks were equal to the possibility of slower growth.
Volatility is back on the increase
Once again we are seeing a big rise in volatility, and we did warn that this might be the case as the US corporate results season unfolded. This has produced plenty of surprises, and to be fair whilst there are an increasing number of companies that missed estimates, there have equally been plenty of very positive forward-looking statements.
