Market Direction Mid Week: Rally Rolls On

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 10/24/2019

Can the stock market keep climbing higher?

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Factors supporting the rally include the prospect of a U.S. - China trade deal, the move by the Federal Reserve to cut interest rates three times this year and resume buying short dated debt to add liquidity to money markets, and a surge in government spending as the federal budget deficit rises toward $1 trillion.

How are major indexes trading?

The Dow Jones Industrial Average rose 92.10 points, or 0.33%, at 27,783.59. The S&P 500 edged up 2.20 points or 0.07%, to 3,094.04, but the Nasdaq slipped 3.99 points or 0.05%, to 8,482.10.

For the year to date the Dow is up 19.10% while the S&P500 is up 23.42%.

On Tuesday the Dow DJIA, +0.33%  ended unchanged at 27,691.49. The S&P 500 SPX, +0.07%  rose 4.83 points, or 0.2%, to end at 3,091.84, while the Nasdaq Composite COMP, -0.05%  rose 21.81 points to end at 8,486.09, up 0.3%.

See also: The stock market heads to record heights even as the Trump impeachment hearings enter a new phase — here’s why

What’s driving the market?

The prospect of a U.S. - China trade deal remains the main factor sustaining a rally that has pushed U.S. stocks record highs in the past five weeks.

But trade talks may have hit a snag over farm purchases, the Wall Street Journal reported Wednesday afternoon. President Trump earlier said China had agreed to buy up to $50 billion in U.S. soybeans, pork and other agricultural products annually, but China is reluctant to put a numerical commitment in the text of a potential agreement, sources said.

The dispute over farm purchases is one of several issues that have delayed completion of the limited trade accord announced by Trump and Chinese Vice Premier Liu He on Oct. 11. Both sides are also at odds over when and by how much the U.S. would agree to lift tariffs on Chinese imports.

Chinese officials have also resisted U.S. demands for a strong enforcement mechanism for the deal and curbs on the forced transfer of technology for companies seeking to do business in China.

In a Tuesday speech at the Economic Club of New York, Trump said a “significant phase one” deal could happen soon, but only if the deal worked to the advantage of U.S. workers and businesses.

“Overall, the calm in the trade war and the broader risk-on sentiment of recent weeks may be more fragile than they appear, and with markets having gone on a euphoria rally lately, it might not take much bad news to trigger a notable correction,” Marios Hadjikyriacos, investment analyst at XM, in wrote.

Meanwhile, Federal Reserve chairman Jerome Powell testified before the Joint Economic Committee of Congress Wednesday, the first of two congressional appearances this week. Interest rates are on hold unless there is a material deterioration in the economy, Powell said in published remarks.

“We see the current stance of monetary policy as likely to remain appropriate as long as incoming information about the economy remains broadly consistent with our outlook of moderate economic growth, a strong labor market, and inflation near our symmetric 2% objective,” Powell said.

Powell’s testimony “suggests that the bar to raise rates is higher than to lower them, even if easier policy is no longer the default option,” said Sal Guatieri, BMO Capital Markets senior economist.

In U.S. economic data, the U.S. federal government’s budget deficit in October rose 34% from a year earlier to $134.5 billion, putting the U.S. on course to top the $1 trillion mark in fiscal 2020 for the first time in eight years, or nearly 5% of gross domestic product.

In other data, U.S. inflation was slightly higher than expected in October. The consumer price index was up 0.4% during the month, as Americans paid higher prices for gasoline, medical treatment and recreation in October, but overall, inflation remained stable. For the year the cost of living rose 1.8%.

What are other markets doing?

Gold prices posted the first gain in five sessions on Wednesday, with uncertainty over the outlook for a U.S.-China trade deal and the first day of public impeachment proceedings against President Donald Trump helping to support haven demand for the precious metal. Gold for December delivery GCZ19, +0.10%   on Comex rose $9.60, or 0.7%, to settle at $1,463.30 an ounce, Oil futures ended higher on Wednesday, with prices recouping most of the losses they suffered over the past two trading sessions. West Texas Intermediate crude for December delivery CLZ19, +0.47% tacked on 32 cents, or 0.6%, to settle at $57.12 a barrel on the New York Mercantile Exchange.

The 10-year Treasury yield fell 4 basis points, the most in more than a week, with the 10-year U.S. Treasury note TMUBMUSD10Y, -0.41%   trading around 1.87%.

In Europe, the Stoxx Europe 600 SXXP, -0.26%  fell 0.3%.

Earlier in Asia overnight Tuesday, the China CSI 000300, -0.09% slipped and Hong Kong’sHang Seng Index HSI, -1.82%  fell 1.8%, while Japan’s Nikkei 225 Index NIK, +0.04% slipped 0.9%.

$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 (10/24/2019)
Dow	up 1,000.87 points a 3.73% gain	11/13/19
Nasdaq	up 329.05 points a 4.02% gain	11/12/19
S&P 500	up 92.32 points a 3.07% gain	11/12/19

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