“UBS technical analysts Michael Riesner and Marc Müller make some grim predictions for the stock market in their latest weekly market commentary.
Riesner and Müller write that the continued outperformance of U.S. stocks versus the rest of the world does not seem sustainable.
From their note:
Last week we highlighted the increasing divergences on the inter-market side between the still resilient SPX and the weak picture in Asian markets, underperforming cyclical sectors, declining inflation expectations, and the intact bull trend in the US dollar. All this finally results in a major divergence forming in the SPX versus the MSCI World, which was not able to break its May 2011 reaction high.
Last week we said that pressure in the financial system is building. If we are correct then it is very likely that this pressure will unfold in a short and sharp correction and the most likely timeframe for this move/event will be later Q3 and/or Q4.
They think 1325 is an especially important level to watch on the S&P 500, saying that if the index breaks below that level, the next stop could be somewhere in the 1100s”
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“UBS technical analysts LOOKUP(“WHOEVER”,INTERN&COUNT1) and LOOKUP(“WHOEVER”,INTERN&COUNT2) make some BINARY(IF(MARKETUP,”positive”,”grim”) predictions for the stock market in their latest weekly market commentary.
TRIMLAST(LOOKUP(“WHOEVER”,INTERN&COUNT1) and LOOKUP(“WHOEVER”,INTERN&COUNT2)) write that the continued IF(OUTPERFORM$US,”outperformance”,”underperformance”) of U.S. stocks versus the rest of the world does IFTHENINSERT(PRIOR(X)=”outperform”,”not”,””) seem sustainable.
From their note:
Last week we highlighted the increasing [“divergences”,”correlations”] on the inter-market side between the [“un-“,”still”] resilient SPX and the IFTHEN(“underperformance”,”weak”,”strong) picture in RANDOM() markets…and the intact [“bull”,”bear”] trend in the US dollar. All this finally results in a major LOOKUP([BULL,BEAR]&WORD) forming in the SPX versus the MOSTPOPULARINDEX(), which was [“not”,””] able to break its LASTDATARELEASE() reaction [“high”,”low”].
LOOKUPCONCLUSION(TRENDING&[OPTIMISM(),PESSIMISM()])
PRINT()