Throw Me a Lifeline

June 21, 2015

Weekly Market Outlook

By Keith Schneider

outlook20150621The Greek drama continues while its new administration called up all its lifelines. This ranged from pleading with its EU bankers to change terms, to potentially cozying up to Russia. The last thing NATO needs is Greece in Putin’s paws.

Ignoring this, most US equity indexes made all new-time highs this week, led by the broad based Russel (IWM) 2000, which held firm by Fridays close, even while the bigger cap stocks populating the Standard & Poor’s 500 (SPY) retraced, giving up more than half of its Thursday gains. SPY was down about 0.5% after adjusting for dividends by Fridays close, and yet again looks sloppy or toppy.

Thursday’s big rally occurred even with prospect of the Greek default and Euro exit. Seasoned observers would say bad news with good price action is bullish. Coupled with the prospect of a slow rise in US interest rates, US equities do seem to have shrugged it all off. A very wise long term operator in the markets that I spoke to on Thursday pointed out that The Baltic Dry Rate index rallied sharply this week, waking up from a deep sleep. This is generally a decent gauge of increasing global economic activity by monitoring the cost of shipping bulk goods. It can be an early indicator of a rise in commodity prices. Gold rallied too, could it be that a whiff of inflation is in the air?

However, in contradiction to that, the Transportation Index (IYT) is lagging the broad market and lingering at the bottom of a declining channel.

Market Breadth remains weak and the rise in equities is selective. One does not want to get caught holding the bag on those stocks that are currently lagging.

Check out this week’s video as we take the pulse of certain stocks with our new Triple Play indicator.

Two indicators you have to see to believe (you'll only see them here)

Free video reveals the stocks at the greatest RISK OF COLLAPSING even if the market stays strong!