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 3/26/2020
Can the stock market keep climbing higher?
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As I mentioned last
week, the stock market probably would not stay bullish very long and it seems
this is coming to fruition. One disturbing technical indicator that happened is
the death cross which usually suggest the market should decline significantly.
Today’s news…
Stocks finished
Wednesday trade deeply in negative territory, with the three main indexes
registering declines of at least 4% and a gauge of small-capitalization stocks
tumbling 7% to start April and a new quarter.
Investors pinned the
day’s downbeat action partly to President Donald Trump, who warned late Tuesday
of a “very, very painful” two weeks ahead for the country in face of a rapidly
spreading COVID-19 pandemic.
The pandemic has
raised fears the world’s largest economy is experiencing an unprecedented
disruption to industries, small businesses and households, resulting in the
worst quarterly performance for U.S. equities since 2008.
What are major indexes
doing?
The Dow Jones
Industrial Average DJIA, -4.44% fell
973.65 points, or 4.44%, to 20,943.51. The S&P 500 SPX, -4.41% slipped
114.09 points, or 4.41%, to 2,470.50, led by sharp declines in real
estate XLRE, -6.06% and
utilities XLU, -6.01%, both off by at least 6%, as investors fear that
people won’t make rent or utility payments.
The Nasdaq
Composite COMP, -4.40% shed
339.52 points, or 4.41%, to 7,360.58.
The
small-capitalization Russell 2000 index RUT, -7.03%, saw even more severe losses, finishing the session
off 81.11 points, or 7%, to end at 1,071.99.
Stocks also ended lower on
Tuesday, capping a quarter that saw stocks tumble from February records into a
bear market at record speed. The Dow logged a 23.2% quarterly fall, its
biggest first-quarter drop on record and biggest quarterly decline since 1987.
The S&P 500 fell 20% for its biggest quarterly selloff since the final
three months of 2008. The Nasdaq Composite fell 14.2% for the quarter.
What’s driving the market?
The uncertainty about when the U.S. can return
to usual business has unnerved investors struggling to ascertain the ultimate
economic impact of social curbs put in place amid the COVID-19 outbreak.
Without a clear view on the timeline of a U.S. recovery, volatility was likely
to remain heightened in the coming weeks, said market participants.
“Everything hinges on how long we are in this
shutdown,” said Anwiti Bahuguna, head of multiasset strategy at Columbia
Threadneedle Investments, in an interview. “We don’t know how long the shutdown
may last, so it’s hard to predict what U.S. growth will look like.”
Also
unsettling investors was President Donald Trump’s warning late Tuesday that a
“very, very painful” two weeks lies ahead for the country. The White House
released new projections for 100,000 to 240,000 deaths in
the U.S. from the coronavirus pandemic even if current social distancing
guidelines are maintained.
The number of COVID-19 cases world-wide rose to 922,00
on Wednesday, while the number of deaths rose to at least 46,000, according to
data from Johns Hopkins University. The U.S. has the most number of cases
world-wide, at 203,608, and 4,476 deaths.
In
economic reports, the U.S. labor market saw growing cracks as businesses
curtailed hiring and shed workers. Automatic Data Processing reported the U.S. economy lost 27,000
private-sector jobs in March, though the data is expected to be of
little use in predicting the official unemployment numbers due on Friday due to
distortions created by the pandemic.
In other U.S. data published Wednesday, the
IHS Markit final U.S. March manufacturing PMI fell to 48.5 from initial 49.2. A
reading of the index below 50 indicates contraction in activity.
The Institute for Supply Management’s March U.S. manufacturing
index fell to 49.1 from 50.1 in February, a less severe drop
than economist forecasts.
Meanwhile, expectations are growing for
another round of fiscal stimulus following the passage on Friday of a $2
trillion relief package.
As
Washington considers other steps for responding to the coronavirus pandemic and
the resulting economic damage, Trump and House Speaker Nancy Pelosi both have
suggested a “Phase 4” package could include spending on
infrastructure.
How did other markets trade?
Government
bond yields extended their drop, with the yield on the 10-year U.S.
Treasury TMUBMUSD10Y, 0.584% tumbling
6.1 basis points to 0.63%.
Oil
prices traded near depressed levels, with the price of a barrel of West Texas
Intermediate crude oil CLK20, 5.268% for
May delivery falling 17 cents to settle at $20.31 a barrel on
the New York Mercantile Exchange.
Low
crude prices have put oil companies under pressure, raising the likelihood that
the U.S. energy sector will see a spate of defaults. The Wall Street Journal reported President Donald
Trump is scheduled to meet chief executives of oil companies to discuss
government measures to support the industry.
In
precious metals, gold GCJ20, +0.49% for June delivery fell $5.20, or 0.3%, to end at
$1,591.40 an ounce on Comex.
The
U.S. dollar DXY, -0.057% rose
0.6% against a basket of its major trading partners, according to the ICE U.S.
Dollar index.
European
stocks traded sharply lower, with the Stoxx Europe 600 index SXXP, -2.90% closing
2.9% lower. In Asia overnight, stocks reported similar losses. The China CSI
300 000300, 0.278% finished
down 0.3%, and Japan’s Nikkei 225 NIK, -0.878% booked
a 4.5% decline on Wednesday.
$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
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The all-time highs since our initial
recommendation to go LONG
this market. Here is how the markets have performed:
Stock Market
Direction Recommendation (3/26/2020)
|
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Dow
|
down 71.80 points a 0.32% gain
|
3/31/20
|
Nasdaq
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up 82.77 points a 1.06% gain
|
3/31/20
|
S&P 500
|
up 38.32 points a 1.47% gain
|
3/31/20
|
Related Link: http://www.stockmarket-direction.com/
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