During the last week we started seeing some signs of distress in the Nasdaq, with some heavyweights beginning to show a little bit of weakness. Our strategists put up two posts on the current outlook on the Nasdaq on the International Outlook blog, which showed some key support levels being tested and broken. With those in mind we are slightly more cautious this week.
One of the things that we’ve been thinking about over the last few weeks is; the past. We find ourselves wondering how similar this current situation is to the one back in 2009/10. Could the monetary stimulus just refuel the rally and keep the market (first) and the world economy (second) pushing higher and harder? Possibly, yes.
So the trade deal is all but done. Overall, should bullish sentiment remain the theme for the week, it very likely that the Rand strengthens and even that emerging markets outperform developed markets for some time to come.
So this week is a little weird. There are some bullish looking setups emerging on some of the banks, although they are in the middle of nowhere in terms of large trading ranges.