Market Update - 11th November 2013

 

There are no changes to the Model Portfolio this week.

This week the DJIA and DJTA reached new bull market highs despite the decline later in the week.  The industrial and transport stocks have now joined the broader S&P 500 in reaching new recovery highs, though the utilities continue to lag. 

Technical Trend

Economic: News on the economic front continues to be positive. 3Q2013 US GDP was ahead of expectations at 2.8%, while unemployment data was also positive. However, consumer confidence and sentiment declined in October.

Technical: From a technical standpoint, the technical trend still looks okay, though market breadth has started to diverge. The Advance/Decline Line has been unable to confirm the recent stock market highs and this bears watching in the weeks ahead. There is still little urge to sell as momentum investors continue to chase performance.

Strategy: The market is starting to look tired once again and remains overvalued, overbought in the near-term and investor sentiment having reached an optimistic extreme. We therefore maintain our cautious stance for now.

Next update: Monday 18th November 2013.

 

Equity market performance by sector.