And just like that, the former resistance levels are beginning to act as new support in the major indices, just as they did back in January before all of this noise. Nearly every sector is now back above their price from the first week of the quarter while also making a higher low during the current rally from the decline in April. These are incredibly bullish developments, especially given they’re occurring alongside a weakening US dollar.
The Energy sector continues to be one of our main areas of focus. This has been one of the main proxies for global growth over the past decade and with most European markets up double digits year to date, we believe this sector will finally start to break out now that the US is starting to join in the rally. Additionally, long term interest rates continuing to rise and energy stocks failing to break down despite the massive decrease in oil prices during April, all point to a strong sector poised for higher prices.
Most importantly, global investors are back to searching for buying opportunities in the US equity market. These conditions may change again quickly, but for now we're back in an environment where stocks are being bought on any weakness and new 52-week lows are nowhere to be found.
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