Market Direction: BULLISH alert
issued 10/24/2019
What is the current stock market direction?
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
The stock market is getting carried away to new record heights and in the process it is inviting accusations that it is simply getting carried away. Nothing seems to bother it; and everything is spun with a positive spin.
Earnings multiples are expanding along with the sense of complacency in the idea that the stock market is bound to keep running.
That's usually about the time it gets tripped up, but for now, the good times are set to keep rolling at the open.
Currently, the S&P futures are up eight points and are trading 0.3% above fair value. The Nasdaq 100 futures are up 35 points and are trading 0.4% above fair value. The Dow Jones Industrial Average futures are up 78 points and are trading 0.3% above fair value.
There isn't any specific news to account for this morning's bullish bias. Some will stretch to attribute it to China registering a stronger than expected pickup in industrial profit growth in November, but all it really boils down to is pure momentum.
The upward trend has not been challenged; hence, it will continue to be ridden for all it is worth on the notion that the trend is your friend until it isn't.
If there is one fly in the ointment this morning, it might be the bullish bias seen in the Treasury market. That doesn't necessarily fit with the bullish bias in the stock market, but alas, the 10-yr note yield has fallen three basis points to 1.88%.
That might be an initial hedging move in anticipation of a pullback in the stock market, yet it is worth noting that there hasn't been a concurrent pickup in the CBOE Volatility Index ("VIX"), which is down 0.5% to 12.58.
The latter level implies there is currently little worry about a stock market setback in the near term, but as stock prices continue to climb, it's fair to say the VIX should start attracting some more hedging interest -- and that interest could build quickly since there is currently little fear of any meaningful setback in the stock market.
We'll be keeping our eye out there, just as we are keeping our mind tuned to the feeling of complacency that is becoming palpable in a stock market feeding off animal spirits at year end.
U.S. Treasuries ended the week on a higher note, pushing yields lower across the curve. The 2-yr yield declined five basis points to 1.58%, and the 10-yr yield declined five basis points to 1.87%. The U.S. Dollar Index fell 0.7% to 97.03. WTI crude rose 2.3%, or $1.36, to $61.74/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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10/24/2019
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12/27/2019
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Difference
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26,805.50
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28,645.26
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1,839.76
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8,185.80
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9,006.62
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820.82
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3,010.29
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3,240.02
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229.73
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