US Technology Sector Setting Up For A Momentum Breakout Move

Our research team has warned that the precious metals market would enter a 30~45 day rotational price trend on January 28, 2019. On January 16, 2019, we suggested that the upside price move in the US stock market had reached initial upside target zones and suggested that price pullback would be healthy near these levels. Today, we are warning that the markets are poised for a momentum breakout move that is setting up after the minor pullback in most US stock sectors the past week.

There are a number of news factors which support both or our analysis of the precious metals market and result in a failure of our analysis of the US stock market. First, the opportunity for the US government to agree to and pass a funding bill that removes uncertainty for many months. If the US government is able to pass a longer-term funding bill that eliminates pricing pressures and fears in the markets, the US stock market could breakout to the upside on a new momentum move very quickly. Second, if the US/China trade issues are resolved, in any substantial form, and trade begins to normalize over the next 6+ months, this could add even more fuel to the upside of the market and create a boost of momentum for almost all sectors.

The big question remains, which side of the fence will this news fall into and what will the likely outcome be in the US Stock market?

We continue to believe a massive capital shift is taking place throughout the globe. Investors and traders are continually seeking safety and returns for their capital. Even the emerging markets present a unique opportunity right now, they also present a high degree of risk. We believe any news related to the US government funding and/or the US-China Trade issues will result in a new momentum rally in the US stock market potentially resulting in a 4~8% upside rally.

Right now, unless some news solidifies regarding either of this two-news event, we believe a downside price rotation is still in the cards starting next week and could last 15~25 days. Should some news hit the wires that alleviates the uncertainty and concerns, then the downside expectations we have may be muted or failed expectations.

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