[Weekly Market Outlook] Sea Change Underway led by Small Caps, Value, and Foreign Equities

[newsletter.png] Sea Change Underway led by Small Caps, Value, and Foreign Equities October 20th, 2019 Keith Schneider CEO, MarketGauge.com [SeaChangeUnderwayledbySmallCapsValueandForeignEquites.jpg]US equity markets were mostly flat this week except for small caps which led, up +1.59% playing catch up. Looking under the hood showed that sector rotation was confusing. Semis and, technology which are the leading hot speculative sectors, backed off as did Utilities which is a safety play. Its unusual that both were down at the same time, hence we have a mixed message. If you'd like to profit from sector rotation and leadership trends in stocks as well as sectors, [check our our recent training session here](. While we are looking under the hood, we see some other very interesting developments unfolding. First, foreign equities are starting to gain ground verses the US and that includes Emerging Markets (EEM), larger and mid cap foreign equities (EFA, which does not include US or Canada) and China (FXI). The biggest gains came from Europe as it appeared that a Brexit deal will happen before the upcoming deadline. However, as I am writing this, the British Parliament has withheld passing Brexit and it’s possible it still might not pass. The recent run-up in both the Euro and Eurozone equities could reverse some of its recent gains if Brexit remains unresolved. This week’s highlights are: - US Equity Market remains in a wide trading range - Risk Gauges are still in full risk-on mode - Volume patterns improved with small caps leading (IWM or Grandpa Russell) - Market Internals remain positive while working off running rich short term - Semi’s looks toppy with a momentum divergence in place at recent highs - Small Caps (IWM) improved which if holds could mean the tariff war is at least on pause - Value stocks after a decade long slumber are looking ready to rally hard - Foreign Equities are gaining verses the US - The dollar broke down under some key moving averages Last week we highlighted the wacky volatility US equities were having. Turns out that some players late Friday a week ago bought 400K plus futures contracts on e-minis despite the poor price action and the unknowns about trade talks with China. Supposedly the player made $1.5 billion dollars which is not too shabby. The SEC decided not to investigate it as they thought this was normal trading behavior. Maybe this is the new normal, but after 40 plus years of watching the tape both as a floor trader and from the screens, I think not. The new normal includes the US retreating on the world stage as seen in the Middle East. The full implications of our retreat have not been realized as this is the first act of a new play. What appears as cause and effect, is that US stocks mostly lagged foreign equities since our withdrawal from Syria last week. The dollar also got hit which is not surprising either, considering a new global order is unfolding. For the moment these are the facts, not an opinion. [Free Video]( [Premium Video]( Best wishes for your trading, Keith Schneider CEO MarketGauge [twitter.png]Get more - follow us on Twitter! [@marketgauge]( and [@marketminute]( To stop receiving this go [here.]( | Got Questions? (Office hours 9-5 ET (New York time)) Email: info@marketgauge.com Live Chat: Go to bottom right corner of our [home page](. Call: 888-241-3060 or 973-729-0485 "Market Intelligence at a Glance + Tools For Serious Traders" [Tap here to manage your email subscriptions or stop receiving this email.]( The information provided by us is for educational and informational purposes only. This is not intended to be individualized investment management. If you require investment management, please contact your investment adviser or our affiliated investment adviser, Market Gauge Asset Management, LLC, at [www.mgamllc.com]( MarketGauge.com 70 Sparta Ave, Suite 203 Sparta, New Jersey 07871 United States (888) 241-3060