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Jeffrey Saut: The call for this week

* November 23, 2015

Last week the NASDAQ 100’s 50-day moving average (DMA) crossed above its 200-DMA (Chart 2 on page 3) and the Biotech iShares ETF broke out above its downtrend line (Chart 3 on page 4). Meanwhile the S&P 500 and D-J Industrial Average continue to reside above their respective 50- and 200-DMAs (read: bullish). Also of interest is that the Paris tragedies give Mario Draghi HUGE cover for more quantitative easing (QE), implying higher European stocks and a lower euro currency. We think the way to play that is via the WisdomTree Inter Hedged ETF (HEDJ/$62.15), which is “long” Europe with the currency hedged out. Typically following a Friday option expiration the markets consolidate/pull back the next Monday. But since 1995 the SPX has been higher 60% of the time over Thanksgiving week, by an average of 0.81%. We will see if that plays this week. Happy turkey!

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• George.

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