Euclid Investment Advisory Blog

Review & Analysis at Close December 6, 2021

Comments

After making new highs on Wednesday November 22, the S&P 500 and the NASDAQ 100 both pulled back to their respective rising 12 week trend lines while the NASDAQ Composite pulled back to its rising 26 week trend line, the latter indicating a sharper selloff then the other two indices. The market rallied today with deeply oversold Small Caps rising 2.4%, Banks 2.52% and value stocks.

Equities

Despite their pullback, the S&P 500, and NASDAQ Composite continue their strategic Bullish trends. Europe's uptrend is weaker; Emerging Markets and China are in Bearish trends.

  • Equity Styles: Despite the sell off last week, Large Cap Growth continues leading Large Cap Value and Mid and Small caps. This leadership may be tested and reversed, but not yet.

  • Ranked Sectors:  Leaders - Technology, Consumer Discretionary, Real Estate, and Utilities

    Laggards - Materials, Financials, Industrials, and Communication Services

Fixed Income

The 30-year US Treasury yield fell to oversold, in a negative Long Term trend; 10yr US Treasury yield fell below its slightly rising Long Term trend; the 2-year US Treasury yield rose again, and its Long Term trend is up.

The Yield Curve accelerated its flattening further this past week. The spread plunged and narrowed to 0.78; expect some widening.

 

Currencies

The Australian Dollar, the Euro, the British Pound and Yen all continued weakening.

US Dollar vs. basket of major currencies: US Dollar surged upward past resistance at 96.37, next resistance zone 97.74 to 98.80.

Gold fell again and remains in long-term bottoming pattern.

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