FNArena’s Weekly Insights – June 19 2023
In this week’s Weekly Insights:
-Keep Your Focus On What Matters
-Conviction Calls & Best Ideas
-FNArena Talks
By Rudi Filapek-Vandyck, Editor FNArena
Keep Your Focus On What Matters
The irony about share markets is the more share prices rally, the more optimistic we all become, and the stronger the urge to join in and become part of that rally.
But as one astute market follower stated last week: such reflex makes a lot more sense when the S&P500 is below 3900, where it was late last year or in February, than it does when the index is where it is now.
At least at those lower levels the argument can possibly be made that any forthcoming recession has already been accounted for.
Now the index has crossed 4400, anyone buying today needs to keep the fingers crossed and hope there will not be a recession, in contrast to forward-looking economic indicators.
I do note, following multiple weeks of index gains, several market watchers are now warning their clients technical indicators are flashing ‘overbought’ warnings, which is not a reliable timing indicator, but merely a reflection of how strong and one-sided market momentum in the US has been recently.
History does suggest overly stretched market momentum signals tend to be followed up by a general market retreat, though not necessarily immediately.
