Market Direction: BULLISH alert
issued 9/21/2017
$tockMarketDirection proprietary model is currently BULLISH. We strongly encourage you to monitor positions closely, exercise proper money management strategies
and follow us at $tockMarketDirection for ALERTS we may issue advising a
change in the current market direction. Stay tuned and follow us. If
you have a testimonial or comment of how this website has helped you we would like to know, write us. Share with a friend. Cha-ching.
Stock
on the Radar (STAR)© was launched 6/19/2017 Sunday evening. When there
is a new stock recommendations for the week it is typically made
available late Sunday, so investors can prepare to take a position when
the market opens Monday for trading.
To view this trade for 'FREE' just click the link below and register to the website.
Click here to register!
Last Week Review: Stocks fell sharply on the week, with both the Dow Jones Industrial Average and the S&P 500 falling more than 3.5%, posting their worst week since January 2016. This was the first weekly drop in major U.S. stock indexes of 2018, following four weeks of strong gains. Most of the downside, in our opinion, can be attributed to the rise in interest rates, as expectations for further Fed policy tightening and stronger economic readings (posing potential support for inflation) have lifted rates and investor caution. Fed policy uncertainty is a likely catalyst for volatility this year, but it should not be forgotten that interest rates remain historically low, and while we expect them to rise gradually, we believe rates are still well below levels that risk choking off economic growth.
During Sunday's big game, even the breaks in the action are enjoyable. Based on the reported sticker price of $5 million for a 30-second commercial, stocks aren't the only thing that have soared recently.1 But the market took a less enjoyable break of its own last week, falling 3.9% -- its largest weekly drop since January 2016.
Think of this as throwing an interception, but during a game in which you're already up by five touchdowns. This was only the fourth weekly decline in the last 21 weeks. The market posted back-to-back down days of more than half a percent, which it hadn't done since November 2016. Last week saw three days with declines greater than 0.50%, but this hadn't occurred in more than two years. In other words, rather normal levels of volatility are prompting sharp reactions because we haven't seen normal volatility in some time.
Volatility can be unsettling, but it should not be forgotten that the market is up 52% over the past two years.2 This was a turnover in an otherwise banner season. It also raises the question of whether this marks a new direction for the market? Our answer: yes and no.
Yes, we think we are in for a new level of volatility in the stock market. Not abnormal, but certainly different from what we've seen lately. Volatility has been running at record low levels for an extended period, and we think larger daily swings in stock prices should be anticipated. At the same time, no, we don't believe this is a new course for the market. The broader conditions that have fostered the rally are not fading. In fact, many appear to be improving. This won't prevent periodic sell-offs, but we do think this means they will be temporary. We believe there is still time left on this bull market's clock.
To view this trade for 'FREE' just click the link below and register to the website.
Click here to register!
Last Week Review: Stocks fell sharply on the week, with both the Dow Jones Industrial Average and the S&P 500 falling more than 3.5%, posting their worst week since January 2016. This was the first weekly drop in major U.S. stock indexes of 2018, following four weeks of strong gains. Most of the downside, in our opinion, can be attributed to the rise in interest rates, as expectations for further Fed policy tightening and stronger economic readings (posing potential support for inflation) have lifted rates and investor caution. Fed policy uncertainty is a likely catalyst for volatility this year, but it should not be forgotten that interest rates remain historically low, and while we expect them to rise gradually, we believe rates are still well below levels that risk choking off economic growth.
During Sunday's big game, even the breaks in the action are enjoyable. Based on the reported sticker price of $5 million for a 30-second commercial, stocks aren't the only thing that have soared recently.1 But the market took a less enjoyable break of its own last week, falling 3.9% -- its largest weekly drop since January 2016.
Think of this as throwing an interception, but during a game in which you're already up by five touchdowns. This was only the fourth weekly decline in the last 21 weeks. The market posted back-to-back down days of more than half a percent, which it hadn't done since November 2016. Last week saw three days with declines greater than 0.50%, but this hadn't occurred in more than two years. In other words, rather normal levels of volatility are prompting sharp reactions because we haven't seen normal volatility in some time.
Volatility can be unsettling, but it should not be forgotten that the market is up 52% over the past two years.2 This was a turnover in an otherwise banner season. It also raises the question of whether this marks a new direction for the market? Our answer: yes and no.
Yes, we think we are in for a new level of volatility in the stock market. Not abnormal, but certainly different from what we've seen lately. Volatility has been running at record low levels for an extended period, and we think larger daily swings in stock prices should be anticipated. At the same time, no, we don't believe this is a new course for the market. The broader conditions that have fostered the rally are not fading. In fact, many appear to be improving. This won't prevent periodic sell-offs, but we do think this means they will be temporary. We believe there is still time left on this bull market's clock.
Here are three reasons behind last week's market sell-off:
- Good jobs raise worries of a bad Fed
- Strong fundamentals have set a high bar
- Even the strongest bull gets fatigued
How the market finished last week, the S&P
500 down 3.9%, the Nasdaq down 3.5%, and the Dow down 4.1%.
This Week: Q4 earnings season is about
half over now. With 248 companies (49%) of the S&P 500 having reported so
far.
On
the negative side, interest rates and volatility are up, equities and bonds are
down, and another government shutdown is looming at the end of the week. On the
positive side, earnings season is going well and economic data continues to be
very strong. The question for next week is whether or not the positive factors
can regain control.
As
I mentioned last week, the 1/22 CR (continuing resolution) deal will only keep
the government open through week Thursday (2/8) unless a new agreement is
reached prior to that time. Since that has not happened yet, the placeholder
for the shutdown that could begin on 2/9. If history is any guide (and we can
never be sure it will be) a shutdown seems unlikely to hurt the markets in the
long-term; and could even be bullish.
Meetings of the Reserve Bank of Australia (RBA) and the Bank of England (BoE) dominate the monetary policy sphere, and while no changes are expected, the comments will be worth watching.
UK services purchasing managers index (PMI), and Institute for Supply Management (ISM) services in the US are other key points to watch. Meanwhile on the earnings front, full-year numbers from BP, Rio Tinto and GlaxoSmithKline in the UK, plus quarterly reports from Tesla, Twitter, and Disney are highlights on the US front.
Meetings of the Reserve Bank of Australia (RBA) and the Bank of England (BoE) dominate the monetary policy sphere, and while no changes are expected, the comments will be worth watching.
UK services purchasing managers index (PMI), and Institute for Supply Management (ISM) services in the US are other key points to watch. Meanwhile on the earnings front, full-year numbers from BP, Rio Tinto and GlaxoSmithKline in the UK, plus quarterly reports from Tesla, Twitter, and Disney are highlights on the US front.
Economic
Calendar: ISM Non-Mfg Index (2/5), JOLTS (2/6), International Trade (2/6), Consumer
Credit (2/7), Wholesale Trade (2/9)
Some of the major earnings announcements on deck: NVDA,
GILD, CTSH, TSLA, K.
Related Link: http://www.stockmarket-direction.com/
No comments:
Post a Comment