Market Notes

September 21, 2018

September has historically been the worst month for the US markets, but they didn’t get the memo this year. Sort of like the rest of the world didn’t get the memo about 2018 being another positive year. At last check, most markets around the world were down for the year, with only the USA and France showing gains. This probably goes back to the strength in the US dollar which we have talked about in the past couple blogs. Speak of the devil, err dollar, the $DXY (dollar index) just completed a pretty perfect looking head and shoulders pattern on the 1-year chart.

Head and Shoulders Pattern in the SPX

With the dollar retreating from highs over the past couple of weeks, stocks around the world have seen some relief from the pressure of a strong dollar, particularly the emerging markets. However, these global stocks are still struggling to break out of their down-trends.

The S&P 500 breakout has held after retesting the support (green line) from the January highs. This is a positive sign through the end of the year, however we are still waiting on the MACD to confirm the upward momentum. In our last blog we said:

“In the very-short-term the trend is down and we still see risk of a similar event to the pullback earlier this year, but the old high will act as some support.”

Turns out that was pretty accurate. Now, if we can get momentum to confirm this breakout, we should be setting up for a strong Q4 (at least in US markets).

The January high held as support.

Shane Fleury, CIO

Elevate Capital Advisors

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