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Momentum Drives Market Higher: Newton's Technical Take
18 Aug
Summary
- Momentum, not dips, is currently driving market gains, according to technical analysis.
- Fundstrat's Mark Newton predicts choppiness until the mid-term elections.
- Energy and materials are top sectors now; tech expected to rebound long-term.
Technical strategy expert Mark Newton suggests that market momentum, rather than opportunistic dips, is fueling the current rally. He anticipates a period of market consolidation and choppiness in the months leading up to the mid-term elections.
Newton highlights that the market's resilience stems from broad sector participation rather than just a few large companies. He advises investors to consider gradually investing their capital, especially for those with a longer-term outlook.
For the near term, Newton identifies energy and materials as top-performing sectors, with a particular focus on refiners and integrated energy companies like Valero and Chevron. Looking further ahead, he sees a strong potential for technology stocks to experience a significant comeback.
Newton maintains a year-end target of 8000 for the S&P 500, but cautions that the ascent may be uneven. Key risks include rising long-term interest rates and a surge in crude oil prices, which could introduce volatility.
