By: Stefan Penkov
Last week brought some volatility and a corrective move to the downside. The market was due for a retreat after two months of continuous increase. Nothing to worry about. In a way it is a very good thing that we are going trough this correction as it will take off some of the steam and will settle a base for a new and strong leg-up.
NASDAQ is holding better than any other American index which is showing the eventual best place to be in the next couple of months.
The resources are keeping their good move up and show even a better strength than the broad market. Taking into account the present correction all over the place, it is not surprising that the resources and the commodities shares are following the down move. Hold your positions and add more to your holdings if you have available cash.
The currencies have achieved their intermediate target prices and a correction is imminent. This in turn is a good thing for the US dollar and the US$ Index which is expected to rise and surpass 80. The short term rise of the US dollar will make things easier for the Fed which is expected to lower again the interest rate. Another .50 will not be a real surprise.
The present correction is going to have a very short life and a renewed move up is expected to start no later than the end of October.
Good investing and best regards,
Stefan Penkov
