Week Ahead: The Bulls Are Getting Stronger

Facebook
Twitter
LinkedIn

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

Facebook
Twitter
LinkedIn

Here are more articles you may like

Claim Your Free Guide Today

Give us your email and we will give you the tools to change your life. 

FREE 7 DAY EMAIL COURSE

Learn about Early Entry Points & much more...

© ChartYourTrade | Contact us: website@chartyourtrade.com

Disclaimer: All communication from ChartYourTrade is general in nature and for educational and general informational purposes only. Under no circumstance should it be considered personalized investment advice. All our work is general in nature and not specific to any one person. All the information on this site and/or that originates from us, or any of our partners or affiliates, is for educational and informational purposes only and is NOT a recommendation to buy or sell anything. To avoid any conflicts of interest, we do not have a working relationship with any of the companies mentioned in our work. Furthermore, we may have a long, short, or no position in any, or all, of the names that appear in our work and they may change at any time without notice. Investing and trading in capital markets or using margin carries a high level of risk and may not be suitable for all investors. Leverage can work against you as well as for you. Before you decide to invest or trade in capital markets you should carefully consider your investment objectives, level of experience, and risk appetite, among other factors. The possibility exists that you could sustain a loss of some, all, or more of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with capital markets, investing/trading, and seek specific investment advice from an independent financial advisor and other professionals. Remember all the information we provide is for educational and general informational purposes only and is subject to change without notice.

Charts and Data are courtesy of MarketSmith Incorporated. Join MarketSmith here.

Terms of Service