Market Direction Mid Week: Power Moves

The trading strategy this website uses as its signature tool is our bullish and bearish alerts. This indicator has effectively been used with accuracy since 2011. The website helps our followers stay in tune with the stock market and profits have been amazing. This post provides a mid-week update on how the stock market has preform. At the bottom of this post are the all-time numbers since the current alert was made. The current bullish alert is moving in the right direction.

Market Direction: BULLISH alert issued 6/20/2019

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U.S. stocks closed higher Wednesday as investors eyed momentum-driven and technology shares again, along with small-capitalization stocks, while awaiting further clarity on central bank stimulus plans and international trade negotiations.

How are the major benchmarks performing?

The Dow Jones Industrial Average DJIA, +0.85%  rose 227.61 points, or 0.9%, to 27,137.04, closing above 27,000 for the first time since July. The S&P 500 index SPX, +0.72%  advanced 21.54 points, or 0.7%, to 3,000.93. The Nasdaq Composite index   COMP, +1.06%  gained 85.52 points, or 1.1%, to 8,169.67.

The Dow notched its sixth-straight gain, while the S&P 500 closed higher for the fifth time in six sessions. The Nasdaq snapped a three-day losing streak.

Wednesday’s action leaves the Dow and S&P just 0.8% from their record closes, while the Nasdaq remains 1.9% from its all-time closing high.

What’s driving the market?

Wednesday’s action saw the waning of a rotation out of market-leading momentum shares and tech stocks into previously out-of-favor value stocks, as momentum stocks found their footing again in afternoon action following early-morning losses. Stocks in the information technology sector also stabilized, rising 1% after three-straight losing sessions.

Momentum strategies focus on buying shares that have previously gained and have offered outsize returns for much of the current bull market, while value shares have lagged behind.

The iShares Edge MSCI USA Momentum Factor ETF MTUM, +0.44%  rose 0.3%, Wednesday after being down as much as 1.1%, while the iShares Edge MSCI USA Value Factor ETF VLUE, +0.98%  advanced 0.8%. So far this week, MTUM is down 2.8% versus a 4.1% rise for VLUE.

Also see: Energy, financial stocks soar: Oversold bounce or the beginning of a breakout? 

Small-capitalization shares also rallied, with the Russell 2000 RUT, +2.12%  rising 2% Tuesday, accelerating a trend that has left the index up 4.6% so far this week versus a 0.5% rise for the S&P 500 index. 

“From a technical perspective, the rally in small-caps is the most important development of the week, so far, as the Russell 2000 hit a five-week high outperforming its large-cap peers,” said Ken Berman, strategist at Gorilla Trades, in a note.

The Russell 2000 has lagged behind the broader market for several months and remains more than 10% below its all-time high despite a recovery over the past couple of weeks, he said, noting that this weeks’ move has seen it move back above both its 50- and 200-day moving averages — viewed as measures of short and longer-term momentum, respectively — for the first time since late-July. If the Russell remains “relatively strong,” major indexes could be on track for a round of all-time highs, he said. 

Meanwhile, U.S. Treasury prices remained under pressure Wednesday, driving up yields, after an August rally. The rebound in yields reflected easing worries over the U.S.-China trade battle, at least for now, as officials from both countries prepare for renewed talks. Potentially boosting sentiment Wednesday was a Chinese decision to exempt some products from retaliatory import tariffs announced in August. 

Investors are also looking for the European Central Bank to deliver an interest rate cut and potentially other measures when policy makers meet Thursday, while the Federal Reserve is expected to deliver another rate cut when it meets next week. President Trump renewed his calls for the Federal Reserve to aggressively cut interest rates, arguing that the Fed Funds rate should be cut “to zero or less.” 

$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, email us. Share with friends.

The all-time highs since our initial recommendation to go LONG this market. Here is how the markets have performed:

Stock Market Direction Recommendation (9/5/2019)
Dow	up 408.89 points a 1.53% gain	9/11/19
Nasdaq	up 52.85 points a 0.65% gain	9/11/19
S&P 500	up 24.93 points a 0.84% gain	9/11/19

Related Link: http://www.stockmarket-direction.com/