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Week Ahead: Dovish Fed Sends Stocks Higher

Dovish Fed Sends Stocks Higher

The big news came from the Federal Reserve last week after it publicly moved back into the dovish (easy money) camp. The Fed said it would not raise rates again in 2019, which is lower than the two hikes expected before the meeting. The Fed also said it wants to end the reduction of its massive $4.2 trillion balance sheet by September which means more easy money for Wall Street. All this supports the bullish tailwind we have seen all year. Remember, the primary driver of the entire bull market we have witnessed since the historic 2009 low has been easy money from global central banks. So, when the Fed speaks, I’ve learned to listen.

Monday-Wednesday’s Action:

Stocks were quiet on Monday as the financials broke above resistance and led the market higher. Meanwhile, shares of Boeing were under pressure after The Wall Street Journal reported the Department of Transportation and federal prosecutors were scrutinizing the development of the company’s 737 Max planes. In other news, shares of Facebook were also under pressure after worry spread regarding the possibility of more regulatory scrutiny.

Stocks opened higher but closed mixed to lower on Tuesday after conflicting reports were announced regarding the progress of the U.S. China trade negotiations. In other news, the Fed started its two-day meeting. After the close, FedEx fell after they slashed guidance and basically said the global economy is slowing considerably. On Wednesday, stocks ended mixed after President Trump said China’s sanctions may last for a long time. In the afternoon, the Fed ended its meeting and said there will not be any more rate hikes in 2019, which is lower than the two hikes expected on Wall Street. The Fed also said it wants to end the reduction of its massive $4.2 trillion balance sheet by September. The Fed also lowered its economic growth forecast the year.

Thursday & Friday Action:

Stocks rallied on Thursday after mortgage rates fell and investors cheered more easy money. Shares of Apple and Micron rallied nicely which helped lift tech stocks and the broader market. Elsewhere, Levi Strauss started trading after a 34-year hiatus and jumped 35% above its IPO price. On the downside, shares of Biogen plunged after the biotech company ended its trials for Alzheimer. Shares of Guess? Inc fell 15% after the company reported lousy earnings. On Friday, the market digested the week’s action.

Market Outlook: Bullish Tailwind Continues

The market remains very strong after the Federal Reserve reversed its stance and moved back into the easy money camp. Near-term resistance is 2018’s high while near-term support is March 2019’s low, the 50 DMA line, and then 2018’s low. As always, keep your losses small and never argue with the tape. Do you know the most under-valued stocks in the market? Our Members Do. Take a FREE TRIAL – CheapBargainStocks.com

Week Ahead: Bullish Tailwind Continues On Wall Street

Bullish Tailwind Continues On Wall Street

The bullish tailwind continues on Wall Street as the market had every chance to fall but didn’t. The market fell in the first week of March after the weak jobs report was announced. Within a few hours, the bulls promptly showed up and defended support which was a very encouraging sign. Then, even in the face of more negative news (China delayed the meeting between Xi and Trump, shares of Boeing and Facebook tanked on negative news for each company, and economic data was lackluster at best), the market still rallied. That, ladies and gentlemen, is the definition of a bullish tailwind. Remember, it is not the news that matters but how the market reacts to the news. For now, near-term support is March’s low and near term resistance is 2018’s high. By definition, until either level is breached we have to expect this sideways action to continue.

Monday-Wednesday’s Action:

Shares of Boeing fell hard on Monday after another Boeing plane crashed over the weekend. At Monday’s open, the Dow fell around 200 points due to the crash but buyers showed up shortly after the open and sent stocks higher. Separately, on Sunday Fed Chairman Jay Powell told “60 Minutes” that he thinks the U.S. economy is still acting well but acknowledged that the global economic slowdown could impact the U.S. Mr. Powell said, “I would say there’s no reason why this economy cannot continue to expand.” He also said, President Trump legally could not fire him which garnered a lot of headlines on Monday. Additionally, shares of Apple rallied hard after the stock was upgraded at Bank of America. Stocks were quiet on Tuesday as more and more airlines grounded Boeing’s 737 max plane. That put more pressure on Boeing’s stock which weighed on the Dow. In other news, the British Pound plunged after Theresa May’s Brexit deal suffered a surprise legal setback. Stocks rallied nicely on Wednesday even after more countries grounded Boeing’s 737 Max airplanes, including the US and Canada.

Thursday & Friday Action:

Stocks were quiet on Thursday after China’s Xi delayed his meeting with President Trump. If that news broke in Q4 2018, the market would have plunged but now the market barely moved. That illustrates how strong the market is right now. On Friday, stocks marched higher as investors digested a strong weekly gain. 

Market Outlook: Bulls Are Back In Control

The market has turned around after the Fed reversed its stance and moved back into the easy money camp. Near-term resistance is 2018’s high while near-term support is March’s low, the 50 DMA line, and then 2018’s low. As always, keep your losses small and never argue with the tape. Do you know the most under-valued stocks in the market? Our Members Do. Take a FREE TRIAL – CheapBargainStocks.com

Week Ahead: 10-Week Rally Continues On Wall Street

10-Week Rally Continues On Wall Street

The market ended higher last week as the very strong 10-week rally continues (for now). The market remains strong as sellers remain marginalized and nowhere to be seen. The fact that the market refuses to fall is an encouraging sign and bodes well for the bulls. Stepping back, the internals remain positive, but keep in mind, most technical indicators are in overbought territory. That increases the odds a pullback will occur in the near future. Remember, until a pullback occurs, the bulls remain in clear control. For now, near term support is the 200 day moving average then the 50 day moving average. On the other hand, resistance is 2018’s high. 

Monday-Wednesday’s Action:

On Monday, stocks rallied after President Donald Trump said he would delay placing additional tariffs on China. Separately, oil prices tanked after Trump told OPEC oil prices are too high. In M&A news, Barrick Gold launched a bid to acquire Newmont Mining for a multi-billion dollar all-stock deal. Stocks were quiet on Tuesday as investors digested a slew of data. The big news came when Federal Reserve Chairman Jay Powell said the Fed sees headwinds and is ready to adopt an easy money stance if conditions worsen.

Separately, consumer sentiment beat estimates which bodes well for the economy. On the earnings front, shares of Home Depot fell after reporting earnings and Macy’s ended slightly higher after the retail giant reported. Stocks were quiet on Wednesday after investors digested the latest round of somewhat disconcerting economic data and U.S. trade representative Mr. Lighthizer said more work needs to be done regarding a US-China trade deal.

Thursday & Friday Action:

Stocks were quiet on Thursday after President Trump left the summit early without agreeing on a deal with North Korea. In other news, the Commerce Department said GDP grew by +2.6% last quarter, which beat the Street’s estimate for +2.2%. Stocks rallied on Friday as investors digested the latest round of mixed economic data. The Institute for Supply Management said U.S. manufacturing activity expanded at its slowest rate since November 2016. Meanwhile, the University of Michigan consumer sentiment index missed the Street’s forecast last month. Finally, the Atlanta Federal Reserve’s GDP Now model also showed an estimate of only +0.3% GDP growth for the first quarter of 2019.

Market Outlook: Bulls Are Back In Control

The market has turned around after the Fed reversed its stance and moved back into the easy money camp. Near-term resistance 2018’s high while near-term support is the 50 DMA line and then 2018’s low. As always, keep your losses small and never argue with the tape. Do you know the most under-valued stocks in the market? Our Members Do. Take a FREE TRIAL – CheapBargainStocks.com

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Week Ahead: Rally Continues On Wall Street

Rally Continues On Wall Street

The market ended higher last week after the bulls continued to send stocks higher. The market shrugged off a spate of weaker-than-expected economic data last week because that means easy money will likely stay for the foreseeable future. In the short-term the market is over bought and due to pullback. The fact that it refuses to decline in a meaningful fashion is a net positive for the market and shows us that the bulls remain in clear control. The next big level of resistance to watch is 2018’s high and the next level of support is the 50 day moving average and then December 2018’s low. Until any damage shows up, the market deserves the bullish benefit of the doubt.  

Monday-Wednesday’s Action:

U.S. stocks were closed on Monday in observance of President’s Day. The market ended slightly higher on Tuesday after President Trump said the March Trade deadline was “flexible.” In other news, shares of Wal-Mart gapped up after the company reported earnings. Gold and silver stocks also caught a nice bid as they broke out to new multi-month highs. On Wednesday, the market ended higher after the Fed minutes were released. The Fed released the minutes from it’s January meeting which is when it did a 180 and reverted back to an “easy” money stance. The Fed is trimming its balance sheet and it is open to ending that process later this year due to “risks” in the global economy. Market participants interpret that to mean more easy money which is bullish for stocks.

Thursday & Friday Action:

Stocks fell on Thursday as investors digested a series of weaker-than-expected economic data. Existing home sales, Durable Goods, Leading Indicators and the Philly Fed Index all came in weaker-than-expected which sent the Dow down 100 points by the close. In other news, shares of Tesla fell over 3% after Consumer Reports said it would not recommend Tesla’s Model 3 because it was not reliable. Stocks were rallied on Friday as investors waited for clarity regarding the U.S.-China trade situation.

Market Outlook: Bulls Are Back In Control

The market has turned around after the Fed reversed its stance and moved back into the easy money camp. Near-term resistance 2018’s high while near-term support is the 50 DMA line and then 2018’s low. As always, keep your losses small and never argue with the tape. Do you know the most under-valued stocks in the market? Our Members Do. Take a FREE TRIAL – CheapBargainStocks.com

Week Ahead: The Bulls Are Getting Stronger

The Bulls Are Getting Stronger:

Stocks ended the week nicely higher as optimism spread regarding the US-China trade deal and investors digested the latest round of earnings data. At this point, the rhetoric from both sides suggests a trade deal will get done and that is a “good” sign for the market. On the economic front, the big miss came from retail sales but that is bullish for stocks because it reduces pressure on the Fed to raise rates anytime soon. Remember, the market loves easy money so any weak data only furthers that cause. So, in some perverse way, we are back in that awkward phase where negative economic data is good for stocks. Technically, it is encouraging to see the Dow and S&P 500 both close above their respective 200 DMA lines which have served as near-term resistance. Meanwhile, the Nasdaq and the Russell 2000 both close near/below their respective 200 DMA lines. For now, the market is getting extended to the upside and due to pullback.  

Monday-Wednesday’s Action:

Stocks were quiet on Monday as investors digested the recent rally below resistance (200 DMA line). On Tuesday, stocks soared after news broke that a tentative border security deal was reached and the government would not shut down on Feb 15. The deal would not completely fund the wall but it would be enough to at least move the needle and get something built. That was considered a big win for Wall Street as it removed a lot of uncertainty regarding the potential impact of another government shutdown and the economic ramifications. On Wednesday, stocks rallied again on optimism that the trade war with China would be resolved.

Thursday & Friday Action:

Stocks ended mixed to mostly lower on Thursday after retail sales plunged in December 2018. The report was released late because of the government shutdown. The Commerce Department said retail sales slid by -1.2% in December which was the largest monthly drop in ten years. Stocks rallied nicely on Friday as optimism spread regarding a U.S.-China trade deal. In other news, energy prices rallied sharply as oil and gasoline prices rallied after a big sell-off a few months ago.

Market Outlook: Bulls Are Back In Control

The market has turned around after the Fed reversed its stance and moved back into the easy money camp. Near-term resistance 2018’s high while near-term support is the 50 DMA line and then 2018’s low. As always, keep your losses small and never argue with the tape. Do you know the most under-valued stocks in the market? Our members do? Take a FREE TRIAL – CheapBargainStocks.com

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