Week-In-Review: Stocks End Week Lower; Erase Most Of August’s Gains
Stocks sold off hard on Friday which sent most of the popular indices lower for the week and erased most of the gains for the month. The small-cap Russell 2000 and the Nasdaq ended the week higher while the S&P 500 and The Dow Jones Industrial Average ended the week lower. The Dow, S&P 500 and Nasdaq all ended in the lower half of their respective weekly range which is not the best sign. In other news, most, if not all of August’s gains are erased as the sellers are doing their best to regain control. For now, the market action over the past few weeks shows some signs of near-term fatigue and a defensive stance is warranted until the action improves. To be clear, if the market doesn’t sell off hard, odds favor, this will turn into another buyable pullback. But for now, patience is key.
Stocks rallied on Monday after China announced tariffs to retaliate against the White House. Tech stocks led the way higher most of the day as investors showed up and continued buying tech stocks after the recent sell-off. Facebook jumped 3% after the company said it is in talks with large banks to incorporate money into its platform. That big jump helped lift the broader Nasdaq higher.
Thur & Fri Action:
Stocks were quiet on Thursday as investors are waiting for the next big catalyst to be released. So far, approximately 90% of S&P 500 companies have reported quarterly results and 76% have reported better-than-expected earnings. Additionally, so far, S&P 500 earnings for the second quarter vaulted nearly 25% versus the second quarter of 2017! That is a big feat. Stocks fell on Friday after the Turkish lira imploded and fear spread regarding economic tensions between the US and some of its Asian counterparts, mainly China and Russia.
Market Outlook: Market Pulls Back
The major indices are once again pulling back and the next important level to watch is the 50 DMA line. The bulls showed up over the past few weeks and defended important support for the major indices -now let’s see if they do it again. The next big level of support is the 200 DMA line for the major indices- then February’s low. For now, as long as those levels hold, the longer-term uptrend remains intact. Conversely, if those levels break, look out below. As always, keep your losses small and never argue with the tape. Want A Bargain? Take A FREE 1-Month Trial To CheapBargainStocks.com and Always Know The Cheapest Stocks In The Market Every Week