Bears are certainly showing the type of strength we haven’t seen in a long time. A week ago at this time futures were surging on news of a “truce” for 90 days between China and the U.S. in their trade spat. But the charts were still not saying lovely things despite a major rally the week prior. And by Tuesday, darkness had descended back on the indexes, with another gut punch Friday. A lot of emphasis was put on a long term Treasury yield dropping below a shorter term Treasury.Continue reading
Looks like the Thanksgiving week rally missed it’s usual target by a week! Optimism of a trade war halt with China carried markets up through the week and as of Sunday evening futures were surging once more as a 90 day stay of execution on the next round of tariffs was agreed to. Giant rallies Monday and Wednesday – with a huge surge mid day intraday Wednesday – helped rocket the indexes to spectacular gains.
Federal Reserve Chairman Jerome Powell spoke Wednesday and his comments on interest rates were considered quite dovish. This led to the largest gain in the S&P 500 since March 26th! While it has not been so pronounced the last year or two – over the past decade whenever the market dare sell off – the Federal Reserve always has come to the rescue with words or actions!Continue reading
For whatever reason over the years Thanksgiving week tends to be market positive, especially the days bracketing Thursday. While we did see a nice rally Wednesday, the selling Monday and Tuesday did not make for a nice week for the bulls. In fact, this was the worst Thanksgiving week since 2011. For those with shorter term time frames there is no reason not to have a lot of cash raised here as there has been a lot of technical damage, and it’s going to take time to fix it. And now we are starting to see some worrying technical signs for the long term as well. On the news front, nothing new – worries about trade with China, global growth slowing etc were offered as the main culprits.
Oil again had a rough week with Friday’s rout (worst day since 2015) capping off the week. This is now 7 down weeks in a row, and on pace for the worst month in a decade.Continue reading
A rough Monday sunk chances for a positive week on the indexes as the choppy action continues. As we mentioned in last week’s recap while some technical indicators improved, solid markets show lower volatility than what we are currently seeing. This week will be interesting because there is usually a positive bias Thanksgiving week as many professional traders are off for the week! Not much news worthy this week – some fears around oil, Brexit, China trade, etc etc – mostly technical conditions continue to be weak.
Macro headwinds, including trade tensions, rising interest rates, a stronger dollar, and slowing growth abroad have also helped to trigger a pivot towards negative sentiment in the market. “This is where peak earnings growth comes in,” Essaye said, arguing that the stock market has been supported this year by two pillars: strong economic growth and strong earnings growth. “The market knows that earnings growth has peaked, and so earnings growth can’t be a reason any longer to ignore the macro picture,” he said.
This past week was saw another positive move up by bulls – especially in the Dow and S&P 500; the NASDAQ was not quite as enthusiastic. Wednesday’s rally was on the legs of an election that was seen as market friendly or at least not as bad as it could have been. Essentially […]Continue reading