Market Direction Mid Week: TSLA Downgraded

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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U.S. stocks closed sharply higher Wednesday for the third consecutive session as Wall Street continued its rebound from a selloff sparked in part by the outbreak of an Asian virus that has killed hundreds and infected tens of thousands.

Bullish sentiment was seen driven by hopes that stepped up containment efforts and work toward new vaccines could blunt the economic impact of the coronavirus.

How did the benchmarks fare?

The Dow Jones Industrial Average DJIA, +1.68% rose 483.22 points, or 1.7%, to end at 29,290.85, while the S&P 500 SPX, +1.13%  gained 37.10 points, or 1.1%, to close at 3,334.69. The Nasdaq Composite Index COMP, +0.43% added 40.71 points, 0.4%, ending the session at 9,508.68.

Those levels mark new closing highs for the S&P 500 and Nasdaq, while the latter also set a new intraday high at 9,574.94.

For the week, the Dow is up 3.7%, the S&P 500 3.4%, and the Nasdaq has gained 3.9%.

What drove the market?

Stocks were lifted in part on hopes that new treatments will soon be brought to bear against the Wuhan virus that has stricken China and spread to other parts of the globe. Sky News reported on Wednesday that U.K. researchers had made progress in lab tests toward a vaccine for the virus that has been likened to SARS, or severe acute respiratory syndrome.

Separately, a research team at Zhejiang University claimed to identify a cocktail of drugs, namely Abidol and Darunavir, that has thus far proven effective at stanching the virus in infected patients. A separate report from China’s media pointed to a combination of Lopinavir and Ritonavir as an effective treatment.

However, the World Health Organization has said that there are “no known effective therapeutics” against the virus, in response to the media reports. The WHO will convene hundreds of experts next Tuesday and Wednesday to create a plan for developing effective treatments against the disease, it said Wednesday, according to Reuters.

“Today’s rebound is being driven by rumors about some progress made on the virus, vaccines that are being worked on and efforts to slow down the spread,” Randy Frederick vice president of trading and derivatives at Charles Schwab told MarketWatch.

The number of confirmed cases of the coronavirus rose above 24,000, as of Tuesday, and Hong Kong reported its first death from the virus, which has claimed more than 490 lives.

Coronavirus update: At least 490 deaths, 350 U.S. citizens arriving from Wuhan, and Nike closes half of its stores in China

Although the outbreak will likely dent China’s growth, overall anxieties have eased, helping Wall Street investors focus on corporate quarterly results, which have thus far been upbeat. A batch of earnings are still rolling out this week.

With a little less than half of the S&P 500 companies having reported, the blended earnings growth rate shows a 0.1% rise, compared against a 2.0% decline expected at the start of earnings season, according to FactSet.

Moves in the market also come after President Donald Trump on Tuesday delivered his third State of the Union address, which painted an optimistic picture of the country’s future and touted the strength of the economy during his tenure.

A report on private-sector employment from Automatic Data Processing Inc. blew past economists’ consensus estimates, showing that 291,000 jobs were added in January, nearly double the consensus estimate of 154,000.

Separately, the services sector of the U.S. economy, which accounts for most activity, grew at the fastest pace in six months in January, according to ISM’s purchasing manager survey.

Earlier, a government report showed that the U.S. trade deficit fell in 2019 for the first time in six years, reflecting tariff-reduced imports from China, with a 1.7% decline to $616.8 billion in December.

 

How did other markets trade?

Government bond yields continued to climb, as the 10-year U.S. Treasury note TMUBMUSD10Y, -0.05%  rose about 6 basis points to 1.66%, a day after its biggest one-day gain since Dec. 12, according to Dow Jones Market Data.

Oil prices jumped, a day after adding to losses that put the contract at its lowest settlement in more than a year. The price of a barrel of West Texas Intermediate crude for March delivery CLH20, +1.48%  rose $1.14, or 2.3%, to settle at $50.75 on the New York Mercantile Exchange. In precious metals, the price of an ounce of gold for April delivery GCJ20, -0.23%  fell $25.70, or 1.6%, to $1,556.70 on Comex, following its lowest close since Jan. 22.

The U.S. dollar DXY, -0.02%  rose 0.3% relative to a basket of six major peers. In Europe, the Stoxx Europe 600 SXXP, +1.23%  closed 1.2% higher.

In Asia overnight Wednesday, stocks rose significantly. The China CSI 300 000300, +0.12%  added 1.1%, Japan’s Nikkei 225 NIK, +1.79% rose 1% and Hong Kong’s Hang Seng HSI, +1.17% advanced 0.4%.

$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 2,568.09 points a 12.11% gain	1/17/20
Nasdaq	up 1,389.14 points a 16.97% gain	2/5/20
S&P 500	up 327.48 points a 14.68% gain	1/22/20

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