Will The Bear Stock Market 'Continuará'?

In 2007, the first Continuará convention was held in Uruguay for fans of comics, role-playing games, fantasy and strategy games.

The convention lasted only four years.

The translation of Continuará is “to be continued.” 

To start 2019, I choose this word and image.

What we will discover soon enough, is whether this bear market is “to be continued.”

We will also discover whether any rallies are more role-playing for the perpetual bulls or in other words, a fantasy game that can change into a sound strategy.

We ended 2018 with some trends to keep on your radar.

We also reminded you that the economic Modern Family will ultimately serve as our best indicator.

Which trends will be “Continuará”?

Which ones will be fantasy?

And which ones will provide a sound strategy?

First trend mentioned in December:

With the market now in a bearish phase, we are looking for more signs of an economic slowdown, with the possible move into raw materials. Should an overall panic set in, the mindset of hoarding something tangible like commodities often follows. 

When it comes to raw materials, we like to watch sugar futures.

To repeat, “Sugar is often a lead indicator. If futures clear and hold over 13.00, that’s a clue

Second Trend:

We believe that interest rates have bottomed.

Although TLTs rallied more recently, we believe that will be short-lived. A move in TLTs below 121 should provide a low-risk opportunity to look at TBTs, the ultrashort.

More on Bonds:

Powell knows all too well, that lowering rates could give us hungry commodity traders a bonus. Hence our belief rates have bottomed.

The Metals

We believe the metals are trying to bottom, but do not merit a big position just yet.

Gold and silver have made a good run up. Currently, I would be looking to take some profits if long from lower levels and have a no loss stop. I would hesitate on any new position unless the dollar closes the week out under 95.50 using the U.S. dollar continuous contract.

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