Market Direction Mid Week: TSLA Down

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

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The market is pretty much exhausted with all the geopolitical issues mainly the Coronavirus after 16 weeks the stock market direction looks like it will make a change. Upon confirmation from are indicators we follow will post any new alert. Check back between tomorrow or Friday for a confirmation, if a direction alert happens. These past few days the market has been like trying to catch falling knives not a good idea be careful with taking new positions for now.

U.S. stocks finished mostly lower Wednesday, with the Dow and S&P 500 index falling for a fifth straight day, as investors digested reports on the spread of China’s coronavirus to Europe and the Americas.

Dozens of American and European companies have now warned of the epidemic’s impact on their supply lines and earnings, including Microsoft MSFT, +1.25%  which lowered its earnings guidance after the market closed Wednesday.

How did major indexes fare?

The Dow Jones Industrial Average DJIA, -0.46% fell 123.77 points, or 0.5%, to settle at 26,957.50, marking the worst five-day point drop for the blue-chip index on record. The S&P 500 SPX, -0.38%  shed 11.82 points, or 0.4%, to finish at 3,116.39, while the Nasdaq Composite COMP, +0.17% added 15.16 points, or 0.2%, to close at 8,980.77, snapping a four-day losing streak and handing it an 0.1% gain for 2020. The Dow and S&P 500 were negative year-to-date.

The Dow and S&P 500 index have now seen their largest five day percentage decline since February 8th, 2018.

On Tuesday, the Dow dropped 879.44 points, or 3.2%, to 27,081.36, while the S&P 500 shed 97.68 points, or 3%, to close at 3,128.21. The Nasdaq Composite dropped 225.67 points, or 2.8%, to finish at 8,965.61. Tuesday’s decline was the fourth straight for all three major indexes.

What drove the market?

Equities fell as the rapid spread of COVID-19 infections and deaths outside of China continued to hang over markets, despite stocks starting out the day with a short-lived recovery.

“The last couple of days have seen like an emotional reaction, as opposed to a fact-based reaction,” Oliver Pursche, chief market strategist with Bruderman Asset Management, told MarketWatch. “The reality is that the data is coming in so quickly and changing so quickly,” he said about the spread of the illness beyond Asia. “It’s really difficult to see that changing over then next three or four weeks.”

While investors pointed to encouraging signs that central banks and policymakers may be more willing to deploy economic stimulus to cushion the blow from the virus, the number of confirmed cases and deaths outside China has continued to rise, particularly in Italy, Iran, Japan and South Korea. Stocks had fallen Tuesday after the U.S. Centers for Disease Control and Prevention said Americans should prepare for the spread of the coronavirus in the U.S.

See: What Apple, Coca-Cola, Nike and other U.S. companies are saying about the coronavirus outbreak

“We’ll see a second drop in the equity markets once the number of infected in these countries with single-digit infections start bumping up after the incubation period of 14 days,” Dec Mullarkey, a managing director of investment strategy at SLC Management, wrote in an note Wednesday afternoon.

“Economists’ forecasts that Coronavirus will only impact Q1 seem incredibly optimistic at the moment – essentially, no one knows yet how bad it will get, and we are waiting for further indications.”

If COVID-19, the coronavirus that has sickened more than 80,000 people, spreads across the U.S. as health officials are warning, consumer-facing companies would be the first to be hit as people isolate themselves and avoid public spaces, analysts said Wednesday.

“Investors have largely been caught off-guard by the serious and far-reaching economic consequence of the coronavirus,” said Nigel Green, founder and chief executive of the deVere Group, a financial services and advisory company. While some multinationals have lowered earnings guidance, “many more are likely to do so in coming weeks. Clearly, this will hit global supply chains, economies across the world and ultimately government coffers too,” said Green.

See: Businesses world-wide count coronavirus cost. And it’s looking bleak.

However, in economic data, U.S. new-home sales soared 7.9% in January to an annualized pace of 764,000, well above the consensus estimate of 722,000. Low mortgage rates have helped to lift homebuying activity.

See: Consumer-facing companies will be the first hit if the coronavirus spreads across the U.S.

How did other markets trade?

Oil futures fell for a fourth session in a row, leaving the price of a barrel of West Texas Intermediate crude for April delivery CLJ20, -1.40%   on the New York Mercantile Exchange lower by $1.17, or 2.3%, settling at $48.73.

In precious metals, gold GCJ20, +0.41%  prices lost ground for a second day in a row, shedding $6.90, or 0.4%, to settle at $1,643.10 an ounce.

The benchmark U.S. 10-year Treasury note yield TMUBMUSD10Y, -0.88%   fell 1.8 basis points to 1.31%, after setting an new intraday low of 1.30%. Bond yields fall as prices rise.

The U.S dollar index DXY, +0.04%  was up 0.1% against a basket of its currency rivals.

Asian markets added to their drop, with Japan’s Nikkei NIK, -1.45%  closing lower by 0.8%. China’s CSI 000300, -1.23%  index, which tracks mainland-listed stocks, fell 1.2%.

European stocks came off their lows, with the Stoxx Europe 600 index trading flat. The FTSE MIB in Italy I945, +1.44%, which has the highest number of confirmed coronavirus cases in Europe, rose 1.4%.

 
$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 2,763.04 points a 10.31% gain	2/12/20
Nasdaq	up 1,652.57 points a 20.19% gain	2/19/20
S&P 500	up 383.23 points a 12.73% gain	2/19/20

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