Although fundamentals will no longer be a reason to push equities higher, investor sentiment and fear of shorting a central bank-driven market should keep prices moving higher.
Trade data out of China Wednesday boosted morale in the region. Chinese equities and commodities have shown broad weakness as concerns about the region's growth remain in the discussion. The pair above is of FTSE China 25 Index Fund
It has seen a drastic decline in relative value since the beginning of the year, but may have found a bottom. With better economic prospects on the horizon, and strength in the commodities sector, Chinese equities could be pushing for a reversal.
The next pair is of Consumer Discretionary Select Sector SPDR
The final ratio is of Dow Jones Select Dividend Index Fund
Investor fear picked up toward the end of the first quarter, as seen in the breaking of the downtrend in the price action, but that sentiment looks to have subsided. As the pair falls, it means investors are pouring more money into lower cap, riskier sectors. As long as the ratio shows relative weakness, US equity markets should continue to ascend.
At the time of publication the author had no position in any of the funds mentioned.
This article was written by an independent contributor, separate from TheStreet's regular news coverage.
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