Testing… Testing…

By James Dondero | May 20, 2015

  • Markets continue to back and fill this week, with crude a classic example. Specifically, after moving through $58/barrel oil is now back testing its breakout. While we continue to believe oil may have bottomed, any upside is likely limited given the tremendous momentum generated by the US Dollar.
  • Bonds are also finding support after several weeks of selling, with the 3.10% area on the 30-yr US Treasury serving as a lid. Until this and the 2.40% area on the 10-yr are eclipsed, we believe yields are most likely setting up an extended trading range.
  • Stocks on the other hand, might be on the verge of moving out of their recent range. While any breakout would need to be confirmed by improvement in market internals, stocks seemingly remain on healthy footing and should be considered in an uptrend until proven otherwise.
  • Finally, markets overseas are again moving higher after consolidating their recent gains. Examples include those in India and Germany which are moving off support, while the Nikkei-225 Average in Japan is at a fresh 15-year high.

The views and opinions expressed are for informational purposes only and are subject to change at any time. This material is not a recommendation, offer or solicitation to buy or sell any securities or engage in any particular investment strategy and should not be considered specific legal, investment or tax advice. There is no guarantee that any of the forecasts will come to pass. Past performance is no guarantee of future results.

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