Market Direction: BEARISH alert
issued 11/23/2018
The
bearish alert is working and bearish investors should be doing very well. Are you on the right side of this market direction alert? If you are not, you are costing yourself money. Leave a comment on your thoughts. Now for the news…
The economy
The S&P 500 fell 2.1% on Friday, as uncertainty surrounding a host of issues, which included politics and trade, continued to provide a justification to reduce risk. Friday's decline pushed the benchmark index to a new yearly low of 2408.12 and a weekly loss of 7.1%.
The Dow Jones Industrial Average (-1.8%), the Nasdaq Composite (-3.0%), and the Russell 2000 (-2.6%) also posted considerable declines to cap weekly losses at 6.9%, 8.4%, and 8.4%, respectively.
The S&P 500 had climbed to session highs in morning action (+1.5%) amid some market-soothing commentary from New York Fed President John Williams. Specifically, Mr. Williams indicated that the Fed is listening to the market and that the path of balance sheet runoff in 2019 is not "inflexible."
That recovery effort, however, was yet again met with selling resistance that drove the market further into negative territory. Disappointment in the inability to sustain a rebound effort from short-term oversold conditions effectively led to a buyers strike that weighed heavily on the indices.
Some discouraging headlines that compounded risk-reduction efforts included (1) the threat of a partial government shutdown due to disagreement over funding for a border wall, and (2) a late-day report that Director of the White House National Trade Council Peter Navarro told Nikkei that an agreement with China in 90 days will be difficult to attain.
All 11 S&P 500 sectors finished in negative territory with the communication services (-3.1%), information technology (-3.0%), and consumer discretionary (-2.6%) groups leading the retreat.
Dow component Nike (NKE 72.37, +4.84, +7.2%), for its part, was the best-performing stock in the S&P 500 after it released a strong earnings report and issued an encouraging FY19 currency neutral revenue growth outlook.
U.S. Treasuries remained resistant to selling pressure amid the equity sell-off. The 2-yr yield dropped four basis points to 2.63%, and the 10-yr yield was unchanged at 2.79%.
Reviewing Friday's batch of economic data, which included Personal Income and Spending for
November; PCE Prices for November; Durable Orders for November; and GDP - Third Estimate for Q3; and the final reading of the University of Michigan Consumer Sentiment for December:
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By the numbers the weekly closing index numbers compared to the initial BEARISH recommendation closing numbers:
Stock Market Closing Numbers
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compared to Recommendation Numbers
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11/23/2018
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12/21/2018
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Difference
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24,285.95
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22,445.37
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1,840.58
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6,938.98
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6,332.99
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605.99
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2,632.56
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2,416.62
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215.94
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