Week-In-Review: Stocks End Mixed As Earnings Season Begins
The market ended mixed last week as the tale of two tapes has returned in 2020. Big money has flowed aggressively into the Nasdaq and Nasdaq 100 type big tech stocks as the rest of the market has slowly rallied. Last week, we saw a rotation out of the over bought and over extended leaders into other lagging areas of the market. Netflix is the first big leader to report and the stock gapped down after lowering guidance. Let’s see how the market reacts to the rest of earnings over the next few weeks. For now, as long as support holds (21 and 50 DMA lines) the market remains in strong shape.
Thursday & Friday Action:
Stocks opened lower on Thursday as the high beta (mostly Nasdaq and Nasdaq 100 type stocks) finally pulled back. After Thursday’s close, Netflix reported earnings and gapped down after the company missed earnings and lowered guidance. Stocks ended mixed on Friday as investors waited for a slew of earnings to come out over the next few weeks.
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.