Week-In-Review: S&P 500 Continues To Flirt With A New Record High
Stocks ended the week higher after investors digested a slew of economic, earnings, and political data. Earnings and economic data were mixed to mostly positive last week and a deal did not get done in Washington before the break. The fact that a deal did not get done is not surprising because, at this point, both sides are too far apart. The good news is that buyers showed up in the market and bought the leaders that were pulling back and that bodes well for this rally. The FindLeadingStocks.com portfolio is doing extremely well this year and having its best year in 3 years and one of its best years since the service started in 2004! It did work out very well that I moved to cash in early March, shorted the market, then covered the shorts, and went long exactly when the market bottomed. It was also good to have loaded up on tech stocks and the stay at home stocks which have soared since! We are in a great position and I’m very bullish on the future.
Monday-Wednesday’s Action:
Stocks were mixed on Monday as a slew of tech stocks continued falling while the lagging areas continued to rally. In other news, hope continued to spread that a deal would be reached for another stimulus package. On Tuesday, the market opened higher after Russia claimed that it developed a vaccine for Covid-19. The buying didn’t last long as sellers showed up and the market fell hard by the close. In political news, Joe Biden picked Senator Kamala Harris to be his vice presidential running mate. Stocks rallied nicely on Wednesday after the bulls showed up and defended the 21 DMA line in the Nasdaq Composite and Nasdaq 100. The Russell 2000 ended slid as it pulled back to digest the recent rally.
Thursday & Friday Action:
The market closed mixed on Thursday as traders digested the latest round of economic, earnings, and political headlines. Cisco Systems (CSCO) gapped down over 11% after reporting earnings and it was the latest big gap down from earnings season. In late July Intel (INTC) gapped down after reporting earnings and hasn’t recovered. On the economic front, the Labor Department said initial jobless claims fell to 963,000, beating estimates for 1.1M. In other news, hopes faded for an imminent stimulus deal. White House economic advisor Larry Kudlow said the talks were at a stalemate. Stocks closed mostly flat to mixed on Friday after retail sales grew but missed estimates.
Market Outlook: Flood The System With Liquidity
Global governments and global central banks stepped in with massive rate cuts and other “aid” packages to help “stimulate” both Main Street and Wall Street. So far, it is working as intended. As long as March’s lows hold, the market will likely move sideways to higher. On the other hand, if March’s lows are breached, then look out below. As always, keep your losses small and never argue with the tape.
