The continuing short term stock market spurt triggered by better than expected fourth quarter results has provided an opportunity to take profits on strength on a wide variety of seasonal trades (e.g. agriculture, technology, semiconductors, biotech) and to rotate into other sectors that have a history of outperformance during the January to April period (e.g. energy, platinum, copper).

History shows that U.S. equity markets in the year after a Presidential election move higher into the first week in February in conjunction with fourth quarter reports, weaken thereafter until the end of March and moves higher thereafter. Given political events scheduled in the U.S. during the next two months, history is repeating.

Equity Trends

The S&P 500 Index gained 10.21 points (0.68%) last week. Intermediate trend is up. The Index remains above its 20, 50 and 200 day moving averages. Short term momentum indicators remain overbought and showing early signs of rolling over.

The TSX Composite Index eased 47.20 points (0.37%) last week. Intermediate trend is up. The Index remains above its 20, 50 and 200 day moving averages. Short term momentum indicators have rolled over from overbought levels. Strength relative to the S&P 500 Index remains negative. The Index has a history of outperforming the S&P 500 Index between now and the first week in March.

The S&P Energy Index gained another 5.46 points (0.95%) last week. The Index broke above resistance at 574.53. The Index remains above its 20, 50 and 200 day moving averages. Strength relative to the S&P 500 Index remains positive. Short term momentum indicators remain overbought.

Platinum slipped $4.30 per ounce (0.25%) last week. Intermediate trend is up. Strength relative to gold remains positive.

Copper gained $0.13 per lb (3.56%) last week. Intermediate uptrend was confirmed on a break above $3.76. Copper remains above its 20, 50 and 200 day moving averages. Strength relative to the S&P 500 Index changed from negative to at least neutral. Short term momentum indicators are overbought.

……go HERE for agriculture, technology, semiconductor, biotech and 45 Charts & Analysis on Don’s Super Sized Monday Report HERE