Investor's Business Daily from the Nasdaq market site in Times Square with

the S&P 500 vying for a break up to new highs will it be able to hold its new my

territory fairly strategies is here to provide a technical perspective on the

markets action plus we're analyzing the rotation into semiconductor stocks as an

improving sector outlook is finally lifting the group back to a position of

leadership and gold is consolidating but it's trading at its highest levels in

over six years State Street Global Advisors will tell us what's behind the

commodities big move in 2019 and what investors should expect from gold in

2020 investing strategies starts now

okay let's get started with this week's market insights the S&P 500 is now hitting

new all-time highs could the breakout indicate a shift away from the

volatility that's defined much of the last several months well joining me now

to provide a technical look at the market is Katie Stockton founder and

managing partner at Fairlead strategies thanks so much for being here today

Katie glad to be here yeah so we're now at new all-time highs for the S&P 500

it's taken us a little while to get here and the last several months have been a

bit of a bumpy ride so what do you make of the fact that we are now back at

all-time highs for the S&P as a technician that is very exciting as you

can imagine and we're seeing gaps up so that's a good thing it shows momentum

behind the move it shows that a lot of people were watching the final

resistance for the S&P 500 which is right around 30 28 so the breakout is

bullish from a technical perspective it relieves the chart of that final

resistance and it reflects positive momentum especially with the gaps up

that we're seeing with for confirmation of the breakout we'd like to see a

couple of days a couple of closing prices above that level to confirm and

then we can look at higher target prices the target that we can derive from this

breakout in particular is about 31 20 and that's based on a measured move

which really just assumes the trajectory of the current trend will maintain

itself as you mentioned we'd seen a lot of volatility preceding this breakout or

pending breakout and that really was a trading range environment so during that

trading range we'd never saw a lot of breakdowns which was a good thing but it

was a very frustrating environment for many folks because it was very whippy on

a short-term basis now theoretically with a breakout we could get into more

of a trending environment all right so is it your anticipation then that we

could see a little bit of sideways action from here ideally you know seeing

that confirmation and it closes above this new high ground would be positive

but how quickly do you think that a new uptrend and holding above this new area

could happen well it should happen immediately if this is a real

we should see those consecutive daily closes above this week and get somewhat

immediate follow-through on back of that we do have a short-term overbought

condition that the market is contending with so there's no guarantee that a

breakout is confirmed if that's the case I think it's just another little pauses

needed to refresh the uptrend and then we'll see a breakout anyway because

really around the world we're already seeing these types of breakouts

maybe not new all-time highs for different benchmarks but certainly

breakouts from that trading range that characterized global equity markets for

a few months and then do you think that this also signals at least a little bit

of a breather from the volatility that has defined the last several months

because we've seen quite the whipsaw action really tied to headlines a lot

but does this really signify that that's more or less in the rearview at least

for the time being it feels that way there's no way to be certain of that of

course but in a trending tape you tend to see less of those down drafts less of

that retracement and of course that would be an easier market theoretically

to trade because you can stay on the right side of the moving averages and

really just sort of ride the trend so theoretically yes alright and we

shouldn't be expecting anytime soon a new test then of the longer term moving

averages well the 200-day moving average has acted as support for the S&P 500

recently it's I believe not to too far below around 28 80 I believe and you can

never rule out a test or retest but it's not a mean reverting factor it's not

something that acts as a rubber band for the S&P 500 where there's a pullback to

that moving average or really any moving average but rather we kind of keep an

eye on those overbought conditions look for a sell signals look for any kind of

loss of market breadth or participation that would indicate a significant

pullback of course right now with breakouts underway we don't have that

right so with the breakouts being pretty widespread what are you seeing in terms

of the sectors that now look appealing to investors oftentimes what we see when

you do see new highs and breakouts you're seeing more offensive sector

leadership and by that I mean area like technology which tend to be more

Grothe more cyclical areas of the market and we are starting to see signs of life

in some of those areas I would also highlight financials as being a source

of newfound outperformance it's very new as I mentioned but it could be a basin

phase in relative terms for financials which could then be a new upside leader

for the market that's right and speaking of financials let's turn our attention

to this week's stocks to watch starting with Bank of America

so the breakout theme continues here Bank of America moving higher and

looking like it's extending its gains what are you seeing in this chart with

the underperformance that we had seen from financials and Bank of America as

one great example of that especially in 2018 it felt like they were never going

to get going again and of course now just in the last couple of weeks we

started to see some signs of life there where we're getting some breakouts above

important levels Bank of America cleared some former resistance of previous highs

where it had met selling pressure and confirmed that breakout it's a little

overextended short-term I would say but that breakout completes a trading range

that have been in place for several months so again there it releases the

the chart of resistance it supports upside follow-through the

beyond the near term and shows a resumption of the uptrend that preceded

that underperformance in 2018 right and this type of action in the group isn't

isolated of course others like JPMorgan also with with similar chart action so

this group does look like it has more than just one chart that is a bright

spot that's fair to say even the regional banks are acting much better

and making higher lows and then subsequently exceeding these short-term

resistance levels all of that would make them a turnaround play and I do think

it's best to have core long positions in long term uptrend and that would not

qualify for many of the financials and yet now with this newfound leadership I

do think people should be you know sniffing around for good opportunities

fantastic and then another area on your radar is the

emerging-market so let's take a look at the EEM iShares emerging markets etf

what are you seeing here because at first glance it doesn't really look like

it's done a whole lot lately but could that change well it's finally captured

some short-term momentum and in doing so it's actually climbed above a year-long

downtrend line that if you take a step back on the chart it looks like a big

triangle formation that's now being resolved to the upside which is the

direction of the prevailing trend before it was established so lower highs higher

lows there's the triangle you see the breakout about the down trend line and

it's a fairly high probability setup or you tend to see upside follow-through

and this would be months and nature not just weeks in nature in terms of the

implications so I think it bodes well for emerging markets not necessarily to

be a source of great leadership globally although there are some sense of life as

the dollar has pulled back there but rather to finally participate in what I

think is a global rally right and maybe look at this area as being able to not

have that home bias and being able to diversify in other areas that could be

strengthening well that and it's a testament to the global breadth behind

the move so we do want to see broad participation not just here in the US

but also globally and that really enhances the sustainability of the

uptrend we're already seeing breakouts and overseas markets like the German DAX

as one great example of that and these aren't necessarily new all-time highs

but we are seeing those breakouts and I think we'll start to see even some

spreading out of the rally rally to things like small caps other areas that

had underperformed so it seems like the message then at the end of the day at

least for the time being is a lot brighter of a picture than all of the

uncertainty and volatility that had been really dominating the market I think

it's a relief of that trading range to the upside and of course that does make

it a more clear picture ahead from a technical perspective if indeed these

breakouts are confirmed but it looks like even if it doesn't happen this we

could probably will happen and you know we do have some

positive seasonal influences underway potentially in Q4 so it bodes well for

that as well all right well I think this is the perfect time to really dive into

the technical side of the market so thank you so much for sharing with us

what you're seeing in the market right now we're happy - all right and after

the break we're going to continue our discussion about sector rotation with a

look at a group that's finally leading the market after a period of

underperformance and that's coming up next

pick winning stocks with Market Smith growth to 50 shows you ideas with big

potential view charts packed with key data use pattern recognition to see

action zones Market Smith by investor's business daily try three weeks for 1995

now it's important for investors to keep tabs on sector rotation because if you

know which sectors are leading the market that'll improve your ability to

select top stocks and enable you to invest in sectors that are outperforming

the market and after a nearly two-year period of underperforming the market

we're now seeing strength in semiconductors stocks amid expectations

for a turnaround in the chip industry cycle and this strength can be evidenced

by the action in the Vanek vectors semiconductor ETFs

after a long consolidation in 2018 and choppy action in 2019 SM H is trading a

solidly at all-time highs it also remains in buyer range from a breakout

past a one twenty three twenty three entry of this Cup with handle based here

now SM H tracks the MV is us-listed semiconductor index which holds the most

liquid chip stocks based on market cap and trading volume this strength and

chip stocks is a positive development for the overall stock market because the

semiconductor market is a key sector of the global economy

chips play a vital role in many industries enabling emerging trends from

5g to cloud computing to self-driving cars to AI and the Internet of Things

among others and within the semiconductor sector chip equipment

makers like Lam research have been leading the group LRCX broke out of a

base in early September and after a small run the stock was able to hold its

gains and move sideways for several weeks then the stock blasted higher on

October 24th in reaction to its quarterly earnings report the report

showed narrowing declines on the top and bottom lines and the company's outlook

was strong the move put shares more than 20% passes by point from early September

and was accompanied by heavy volume which indicates strong demand from

institutional money managers now group peers KLA MKS instruments and ASML have

also been strong performers as of late in another example of recent strength in

the semiconductor sector can be found in Taiwan Semiconductor which broke out of

a cup with handle base several weeks before its latest quarterly report now

the stock wobbled a little bit after the report was issued but shares are now

trading at all-time highs up some 14% from the 44 98 by point here

and elsewhere in the group nvidia is hitting 11 month highs heading into its

quarterly report next month and intel surged higher on October 25th after its

latest quarterly earnings report breaking out over a prior resistance

level now while breakouts and run ups across

the group are positive they're not Universal Texas Instruments gapped down

on its latest quarterly report so keep an eye for continued signs of a

recovering chip industry cycle and be aware of potential threats to the group

from the ongoing US and China trade war and fears for a recession on the horizon

all right well coming up next we're sitting down with State Street Global

Advisors to put this year's gold rally into perspective and analyze the outlook

for gold in 2020 we'll be right back on

cultural capital we are in New York City and San Francisco come with me as I tour

some of the world's most innovative companies from Squarespace to c3a I give

II and figma learn how CEOs built growing companies while maintaining the

ultimate office culture on season 3 of cultural capital on the brand-new Nasdaq

calm

while gold has been consolidating over the last two months it's been on the

move in 2019 the Spyder gold chairs ETF GLD is holding at its highest level

since the spring of 2013 and here to share insights about the precious metals

gains this year and where gold could be headed in 2020 is George Milling-Stanley