Technology, which has been an industry leader, is finally getting an overdue correction, and we will look for buying opportunities in three areas: technology, industrials and finance, explains Monty Guild, money manager and editor of Guild Investment Management,

The 200-day moving average is holding thus far.  A decline below this key indicator could set off a final cathartic decline that would be a great opportunity to buy. 

Our clients hold cash, and we will look forward to buying opportunities which we believe will develop over the next few weeks. 

We remain positive on economic and corporate fundamentals and believe that as the trade rhetoric moderates and serious negotiations commence, the U.S. will be able to correct some of the trade imbalances that currently exist. 

Thus, we think market fear of a trade war will probably slowly dissipate in coming months. 

There are two critical processes going on in global stock markets. 


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One is the end of radical central bank policies such as ultra-low interest rates and quantitative easing.  The other is the final arrival of better global economic growth after the long sub-par period since the Great Recession.  This has set up a tug-of-war between challenged valuations and rising earnings. 

We think rising earnings will ultimately win, and the market will go to new highs.  But in the meantime, volatility is back with a vengeance.  These bouts of volatility will be more easily triggered by news events, will result in sharper declines, and will last longer than they have during the recent years of unusual calm. 

We believe that investors will be presented with more opportunities to buy stocks at attractive prices in the remainder of 2018.  

European Stocks: We remain unenthusiastic about European stocks.

Asian and Emerging Markets: During the current world market correction, some Asian countries have held up very well, especially Vietnam, Thailand, Malaysia, and Taiwan.  We continue to be interested in Vietnam, to which low-cost manufacturing is emigrating as production costs have risen in China.

Gold: Gold has been volatile on an upward trajectory.  We anticipate that gold can move to the $1380–$1390 range.

Cryptos: Regulatory pressure continues to rise on cryptos, especially on ICOs.  Many tokens will be judged to be securities, and companies which float securities or trade in them without the proper authorization of financial authorities will be punished.  Many crypto activities will continue to be unregulated, but those that do not integrate with the formal financial system will find their upside prices capped by their gray-market status. 

The great ICO boom is likely beginning to draw to a close, and future participants will need to be more discerning about the real-world prospects of the companies whose tokens they are buying.

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