Market Direction: BULLISH alert
issued 1/10/2019
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Vote BULLISH (Up) or BEARISH (Down) in the upper right side bar, the current stock market direction weekly closing numbers. Leave a comment. Now for the news…
The economy
U.S. stocks staged a major reversal on Friday, climbing from steep losses to modest gains. The S&P 500 was down as much as 1.6% on persisting trade uncertainty, but positive trade rhetoric helped lift the benchmark index to a gain of 0.4%.
The Dow Jones Industrial Average (+0.5%), the Nasdaq Composite (+0.1%), and the Russell 2000 (+0.2%) also finished higher after being down as much as 1.4%, 1.9%, and 1.5%, respectively.
Ten of the 11 S&P 500 sectors swung positive, led by utilities (+1.7%), materials (+1.3%), and consumer staples (+1.2%). The lone exception was the health care sector (-0.1%).
President Trump fueled early trade angst when he said there was no need to rush a deal after the tariff rate on $200 billion of Chinese imports was raised to 25% from 10% early Friday. He added that the U.S. was working on another set of 25% tariffs on $325 billion of Chinese imports.
The persisting trade uncertainty prompted broad-based selling in equities and general efforts to de-risk. The S&P 500 also fell below its 50-day moving average (2862). Selling conviction abated soon after the conclusion of the current round of trade negotiations in Washington.
Treasury Secretary Steven Mnuchin described the talks as "constructive," and China's Vice Premier Liu He said they went "fairly well." Bloomberg indicated sources that said the discussions produced little progress, but the positive-sounding comments helped spark a rebound attempt.
The U.S. is also reportedly giving China three to four more weeks to reach a deal, which helped provide some clarity on a timeline and improve optimism about the prospects for a deal. President Trump said that talks will continue in the future, and that tariffs may or may not be removed depending on the outcome of these discussions.
The rally caught investors off guard, especially considering that nothing concrete in terms of plans was established. Nevertheless, it prompted short-covering activity that helped strengthen the recovery attempt. The S&P 500 was able to close above its 50-day moving average.
In corporate news, Uber (UBER 41.57, -3.43, -7.6%) made its public debut on Friday, although the price action was much more subdued than past IPOs this year. Shares opened at $42 after pricing at $45 per share, which was already at the lower end of the $44-$50 range.
U.S. Treasuries finished little changed after backing off their morning highs. The 2-yr yield declined two basis points to 2.24%, and the 10-yr yield was unchanged at 2.46% The U.S. Dollar Index was little changed at 97.33. WTI crude declined 0.1% to $61.66/bbl.
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The market direction weekly closing numbers for the indexes this week compared to the initial BULLISH recommendation closing numbers:
Stock Market Closing Numbers
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compared to Recommendation Numbers
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1/10/2019
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5/10/2019
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Difference
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24,001.90
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25,942.37
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1,940.47
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6,986.07
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7,916.94
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930.87
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2,596.64
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2,881.40
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284.76
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