Happy New Year 2015!
My World Market Wrap-Up for 2013 can be found here.
The following charts and graphs show the trends and gains and losses made in a number of world markets for 2014. They will be shown without individual comment, initially, as you can see at a glance where major support and resistance are (50 MA in both cases), and where the outliers are (which ones made the most gains or losses for the year).
Major U.S. Indices
Major U.S. Sectors & Homebuilders ETF
Germany, France & PIIGS Countries
Emerging Markets ETF, BRIC Countries & BRIC ETF
Canada, Japan, UK, Australia & World Index
Commodities ETF, Agricultural ETF, Gold, WTIC Oil, Copper, Silver, Platinum & Brent Oil
US $, Euro, Canadian $, Aussie $, British Pound, Japanese Yen & Swiss Franc
Commodities + Lumber, Homebuilders ETF, U.S. $ & U.S. Bonds
Markets that made the strongest gains in 2014:
- Nasdaq Transportation Index
- Dow Utilities Index
- Dow Transports Index
- Nasdaq 100 Index
- Healthcare ETF
- Consumer Staples ETF
- Financials ETF
- U.S. Dollar
- U.S. Bonds
- Dow 30 Index
- S&P 500 Index
- S&P 100 Index
Markets that closed mildly positive in 2014:
- Materials ETF
- Cyclicals ETF
- Industrials ETF
Markets that made the most losses in 2014:
- Energy ETF
- Commodities ETF
- Brent Crude Oil
- WTIC Oil
- Japanese Yen
- Swiss Franc
- Canadian Dollar
- Aussie Dollar
- British Pound
Markets that closed relatively flat for the year:
- Russell 2000 Index
- Homebuilders ETF
- Emerging Markets ETF
- BRIC ETF
- Agricultural ETF
U.S. markets outperformed most other world markets, as did the U.S. Dollar and U.S. Bonds. However, Small-Caps traded in a large sideways trading range, but this index looks poised to break to the upside...watch to see if the 20 MA remains above the 50 MA (both are currently rising) to signal continued strength...otherwise a cross below could signal a general weakening in U.S. equities.
Of the commodity-producing countries, Canada has been performing better than Australia (which is not confirming the dramatic rise in the Shanghai Index)...we'll see if bubble-like conditions are ripe yet for some hefty profit-taking to occur in China.
Portugal and Greece have been weighing on the EU countries...unless these pick up, I don't expect much improvement in the near term for this group.
A drop and hold below $50 on WTIC Oil could very well weaken and spark a major sell-off in U.S. equities...as could continued weakness in Lumber, Coppper, and the Homebuilders Sector. However, if Oil stabilizes around $60-$75, we may see a short rebound in the accumulation of the riskier sectors until, say, May or June.
Markets have favoured the "Defensive" Sectors this past year...this may very well continue as long as the above-mentioned groups remain weak. Any dramatic weakening of these groups could very well weaken and spark a major sell-off in U.S. equities. We may get some early signals of such a scenario in Forex and U.S. bonds, so I'd watch the U.S. Dollar performance against the above currencies for signs of strengthening or weakening.
In any event, I think market volatility will increase and markets will consolidate in large trading ranges for longer periods of time in between moves, especially if we see a softening in the U.S. labour markets, wages, and company earnings, along with any increasing hawkish talk from the Fed. The S&P 500 Index gained 11.39% for the year...I think we'll be lucky to see half that increase in 2015...say around 5%.
MARKET FORECAST FOR 2015
My Market Forecast for 2015 can be read if you follow this link. (N.B. It was composed on December 12 and my comments were based on the accompanying graphs as of that date.)
Good luck to all in 2015!