Market volatility and switchbacks are now going into their tenth week. But today the uptrend looks like it’s back in gear as the major indexes bounced off their 50 day moving average (dma).
Fear over a Greece default and concern over an undisputed slowdown in China will no doubt persist and continue to plague the market with volatility. For now, I’m still bullish on sectors that are favored by the short/near term trends of a strong US dollar and weak oil prices.
So I continue to like foreign countries that export to the US and are energy dependent. I also think that some elements of the financial sector are undervalued and will benefit from rising interest rates.
An encouraging sign of stability returning is that the yield on the 10 year Treasury has been moving up for the past two weeks and is nearing 2%. A level not seen since the first week of the year.
As always, invest with caution.
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