Euclid Investment Advisory Blog

Review & Analysis at Close April 5, 2021

Comments

The set-up for today's gains by Large Cap Growth stocks began on last
Tuesday's price action and close. Market analysis indicated that Large Cap Growth stocks, particularly Large Cap Tech names, were about to burst upward as they were in a short-term downtrend in a long-term uptrend. For a few days we may see a slight pullback on profit-taking or sideways - choppy action as the gains are digested. Nasdaq market is slightly overextended from recent gains. Systemic market risk is not indicated.

A unique inverse correlation continues: US Treasury Bond Yields relaxed a bit while Large Cap Tech gained. Energy had a knee-jerk reaction to OPEC's production announcement and the re-opening of the Suez Canal.

 The US Dollar gave back a little of its recent gains. As first noted in our March 8th and 15th weekly reviews, the US Dollar started a strategic Bullish trend, which continues. Bloomberg TV carried news item this morning that Goldman-Sachs announced cutting its US Dollar short position.

The market seems oblivious for now to the proposed tax increases on corporations and the upward trend of US Treasury Bond yields.

Equities

All US equity indices strengthened and remain strategically Bullish. Europe improved. Emerging Market flashing caution. China continues Bearish trend.

  • Equity Styles: While underlying trend favors Large Cap Value, its strength vs. Large Cap Growth is weakening. Small caps are ranked leaders but continue weakening vs. large caps.


  • Ranked Sectors: Trend leaders - Energy (despite today's drop), Financials, Materials, Industrials; Laggards - Real Estate, Staples, Health Care, Utilities.

Interest Rates

30-year US Treasury Bond Yield dipped to 2.363%; 10-year Note Yield dipped to 1.721%. Both trend lines are up. Yield curve spread dipped slightly to 1.56.

Currencies

The Australian Dollar is on a Bear Alert. The Euro and Yen in Bearish trends, and the British Pound in a weakening Bullish trend. US Dollar strategically Bullish.

The US Dollar slipped to 92.60 from 92.96 after breaking to upside from a base-building (since December) pattern. Gold is Bearish, moving sideways since March 8.

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