Both equities and commodities ended higher while bonds finished slightly lower in February; large cap stocks outperformed small cap stocks as the Russell 2000 lost steam last month. Looking forward, the Russell 2000 accelerated its downside momentum as we entered into March. Stock's trading volume continued to narrow last week as investors were aware of small upside potential. On the fixed income front, the short-end of the curve is more favorable technically speaking as the 2yr yield was facing heavy resistance from its 200-day moving average, while the 30yr yield found its support from its 50-day moving average that placed downward pressure on the longer term bonds. Investors will be focusing on the Job data next week, and the nonfarm payroll is going to tell the "true story" of whether the low initial claims were a real economic improvement indicator.
Technical Highlights:
• Small cap stocks accelerated its decline; commodities finished lower led by the price of crude.
• Equity internal turned weaker as the percentages of stocks above its 50-day moving average went down sharply last week.
• The "market bottom" group (technology, discretionary and financials) led weekly gains, while the defensive group remained quiet.
• Historical returns show upside bias toward offensive stocks in March; risk control is more important as volatility turns higher.
• The 2yr treasury yield continued to resist from its 200-day moving average, while the 30yr found its support from its 50-day moving average. The yield curve may turn steeper with the current technical setup.
read more at...
http://plus.alpbeta.com/report/201209.pdf
Technical Highlights:
• Small cap stocks accelerated its decline; commodities finished lower led by the price of crude.
• Equity internal turned weaker as the percentages of stocks above its 50-day moving average went down sharply last week.
• The "market bottom" group (technology, discretionary and financials) led weekly gains, while the defensive group remained quiet.
• Historical returns show upside bias toward offensive stocks in March; risk control is more important as volatility turns higher.
• The 2yr treasury yield continued to resist from its 200-day moving average, while the 30yr found its support from its 50-day moving average. The yield curve may turn steeper with the current technical setup.
read more at...
http://plus.alpbeta.com/report/201209.pdf