Last week I noted how the outlook for many equity investors was pretty bleak in light of escalating trade tensions between the US and China. Sentiment was overwhelmingly pessimistic, with the MSCI World benchmark shedding around -3% in the first couple of weeks of May. I however didn’t share these concerns, and remained optimistic on the outlook for the high quality stocks that I own, and have recently featured in our Trading Club.
Here’s what I said in the blog last week:
"In complete honesty, I don’t really share the anxieties that have seen investors panic like they did in the last few months of 2018. This may prove to be complacent, but the chances are that, 'having seen this film before’, the fears will subside and sentiment will normalise from current pessimism with a leg higher in equities. After all, the S&P 500 recorded a new record high in the past couple of weeks..."
Despite this personal optimism, I demonstrated that our US Equities Checklist had turned negative following successive positive months, anticipating a correction in May (exactly what has played out). However, as I revealed to Trading Club members in my exclusive video analysis earlier this week, the Checklist has in fact since turned positive, indicating that the balance of control was potentially shifting from sellers to buyers.
We’ve since seen a really nice bounce in stocks, with the likes of Disney, Microsoft and Heineken gaining 1.4%, 3.1% and 2.6% week-to-date respectively, outperforming the global equity benchmark which is up only 0.4% in the past 5 days.
Heineken (HEIO) - an all time record close...
Microsoft (MSFT) - a really nice looking candle yesterday, following there earnings gap fill...
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