Trends Around the World

By Adam O'Dell  |  August 29, 2018

It’s time to review our Trends-Around-The-World tables.

In late July, I noted how we were seeing improvements across the board in both U.S. and foreign stock markets.

This month, there’s been a resurgence of U.S. outperformance. Brazil (EWZ, -12%), Russia (RSX, -6%), and Europe (FEZ, -1.5%) have held foreign stocks back.

We avoided those losses because most foreign markets have beenbelow their 200-day moving averages, effectively removing them from our list of “buy-qualified” markets.

Stateside, the “rising tide that lifts all boats” environment that I noted in July has indeed propelled nearly all U.S. stock flavors higher in August.

Let’s take a quick tour around the world and see which markets are “buys” and which are “sells,” according to the rules of the Buy-Hold-And-Preserve strategy.

Major Global Indices: Look to U.S. Markets

All four of the major U.S. stock market indices have made positive gains in the last month – between +2.5% (DIA) and +4.4% (QQQ).

Meanwhile, Chinese (FXI, -0.6%), foreign-developed (EFA, -0.8%), European (FEZ, -1.5%), and emerging market (EEM, -2%) stocks all suffered mild losses.

Here’s the updated table, showing how all major U.S. markets are “buy-qualified,” while all major foreign markets are not…

I’m watching the significant divergence between U.S. and foreign stocks closely. It could be a sign of trouble ahead…

Although, there’s also the potential for a “catch-up rally” to develop in foreign stocks.

If the latter happens, there will be opportunities for lucrative gains in foreign markets. But it’s too soon to say – or do – anything. And for now, my indicators are telling us we should generally remain out of foreign stocks.

Top 15 Global Economies: Add India

Of course, there are always a few specific markets worth highlighting.

In July, we added Mexico (EWW), Canada (EWC), and Australia (EWA) to our list of “buy-qualified” country-specific markets. These haven’t made big gains yet, but they remain above their 200-day moving averages.

Over the past month, Indian (INDA) stocks have gained 1.8% – the best of all Top-15 economies, with the exception of the United States (DIA). And so we now add it to our list of “buy-qualified” country markets.

Have a look…

While it’s good to see improvement among some foreign markets, U.S. stocks are still showing superior relative strength and are likely a better bet for the time being.

U.S. Sectors: Nine of Nine On Our Buy-Qualified List

We now have “nine of nine!” U.S. market sectors on our “buy-qualified” list.

Indeed, the “rising tide” I mentioned in July has come to fruition –stateside, at least.

Have a look…

Over the last month, the industrial (XLI), materials (XLB), and consumer staples (XLP) sectors have crossed above their 200-day averages.

Seeing all U.S. sectors in bullish trends is a sign of strength and suggestive that the broader bull market has “legs” to last awhile longer.

Still, some sectors are more likely than others to hand you outsized gains.

Over the last month, the top-performing sectors include: health care (XLV, +5.3%), technology (XLK, +5.2%), and consumer discretionary (XLY, +4.2%).

These three sectors were among the top four positions in our tablelast month. This shows how, very often, “the strong get stronger” – a hallmark of the momentum strategy we use in Cycle 9 Alert.

Here’s where you can revisit the principles of my favorite trend-and-momentum strategy – in Module 3, Maximizing Profits from Today’s Hottest Sectors and Stocks .

Position Update

Shares of Medtronic plc (NYSE: MDT) have already made a strong move higher since I recommended buying into this “potentially lucrative breakout stock” earlier this month.

If you got into the position on the open of August 16, the morning after my Trade Alert (New Opportunity in Health Care ), you paid roughly $91.27.

Last week, shares of MDT jumped to $94 on the back of a strong earnings report… and they’re now trading just north of $96.

All told, we have an open gain of more than 5% already!

I’m recommend you continue to hold this position. Its positive trend and market-beating momentum are still firmly in place.

My Cycle 9’ers took the strong-earnings jump as an opportunity to lock in an 89% gain on half their position… and the remaining half is now up more than 140%.

I’m telling them to “sit tight” in this position, too.

We may have the opportunity here in Seven-Figure Trader to hold on to shares of MDT longer than my Cycle 9’ers. Remember, options are short-term trading vehicles with expiration dates… so we’ve got to “get in, capture the meat of a move, then get out.”

That’s one reason we’re able to capture massive gains so quickly. Although, it’s always bittersweet to leave a good trade “too early” – and that’s one benefit of buying the stock outright, as I recommend doing here, in Seven-Figure Trader.

Nonetheless, the health care sector… the health care equipment industry group… and shares of Medtronic, specifically… are still poised to outperform the broad market.

So, we’re in the right place at the right time!

Stay the course for now.