27 Apr
Daily Market Commentary

Week-In-Review: Stocks End Week Flat As Earnings Continue

Stocks End Week Flat As Earnings Continue

It was another volatile week on Wall Street. Stocks ended flat as investors digested a slew of earnings reports and the bulls showed up and defended the longer term 200 DMA line. The major indices opened the week with a big selloff and then the bulls showed up right on cue and defended the 200 DMA line and stocks bounced back in the latter half of the week to end relatively flat to slightly lower. So far, earnings remain strong but a lot of that was already priced in so we are seeing a somewhat sluggish reaction on Wall Street. In the short term the 50 DMA line is the next area of resistance to watch while the 200 DMA line is the next area of support. Stepping back, we have to expect this sloppy sideways action to continue until one of those important areas are broken. From where I sit, the market looks like it wants to rally from here it is just taking a break to digest the very strong 2 -year rally we just enjoyed. Stay tuned, because a lot more earnings are slated to be released over the next few weeks. 

Mon-Wed Action:

Stocks were very quiet on Monday as investors waited for a busy week of earnings to be released. Stocks fell over 500 points on Tuesday even as earnings remained mostly positive. Separately, the yield on the 10-year treasury note topped 3% for the first time since 2014. CAT gapped up nicely after reporting earnings but the stock fell during the session. GOOGL fell nearly 5% after reporting earnings, even though the company beat on both the top and bottom line. Tuesday’s action came after the major indices failed to trade above their declining 50 DMA lines, which is not a healthy sign.

Stocks were quiet on Wednesday as a slew of mostly stronger-than-expected earnings were released. Big stocks such as BA, TWTR, FB QCOM, T, V, EBAY, and Ford were some of the well-known names to report numbers. Elsewhere, the benchmark 10-year Treasury yield traded at 3.03%. Investors are concerned that higher rates may slow the economy and hurt companies’ ability to buy back their own stock. The fact that the bulls showed up and defended the longer term 200 DMA line (once again) is a bullish sign.

Thur & Fri Action:

Stocks rallied nicely on Thursday after the bulls showed up and defended the longer term 200 DMA line on Wednesday. Investors also digested a slew of earnings data from AMZN, MSFT, INTC, and several others reported earnings. Stocks were quiet on Friday after the government said the U.S. economy grew by 2.3% in Q1 2018, which beat the Street’s estimate for 2%. Stay tuned, because a lot more earnings are slated to be released over the next few weeks.

Market Outlook: Bulls Are Fighting

The market is trading between important resistance (2018’s high) and important support (February’s low). Until either level is broken, I have to expect this sloppy, sideways action to continue. On the downside, the big level of support to watch is February’s low and the 200 DMA line. For now, as long as those levels hold, the longer-term uptrend remains intact. Conversely, if those levels break, look out below. On the upside, resistance is now 2018’s high.  As always, keep your losses small and never argue with the tape. Want 1-0n-1 Coaching Lessons From Adam? Click Here To Learn More

20 Apr
Daily Market Commentary

Week-In-Review: Stocks End Week Flat As Earning Season Begins

Stocks End Week Flat As Earnings Season Begins

Stocks opened the week on a positive note but ended relatively flat as investors continue to digest a slew of earnings. So far, most of the companies that have reported earnings have beat on both the top and bottom line which is an encouraging sign. It is important to keep in mind that we are only one week into earnings season and there are still a slew of companies that are slated to report earnings. Technically, the market started the week below its 50 DMA line and ended the week near it. For now, this is an important area of support that the bulls want to defend in order for the market to head higher in the weeks ahead. On the other hand, if the bulls can’t defend the 50 DMA line over the next few days, then we have to expect that sloppy sideways action to resume between the 50 and 200 dma line. For now, I remain optimistic because the long-term technical and fundamental action remains healthy.  

Mon-Wed Action:

On Monday, stocks rallied over 300 points after fears eased regarding the situation in Syria. Elsewhere, Bank of America and Netflix were some of the high profile companies to report earnings on Monday.

On Tuesday, stocks jumped over 200 points helping the major indices jump back above their respective 50 DMA line as investors digested the latest round of earnings data. UnitedHealth rallied over 3.5% after it reported better-than-expected earnings and raised its outlook for 2018. Goldman Sachs fell after posting better-than-expected earnings and revenue for the first quarter, boosted by a 38 percent jump in equities trading revenue. However, the stock fell after encountering resistance near its 50 DMA line. Johnson & Johnson fell after reporting earnings.

Stocks were relatively quiet on Wednesday as investors digested a slew of earnings data. IBM gapped down after reporting earnings which weighed on the Dow. Elsewhere, transportation stocks rallied after CSX posted quarterly results that easily beat Wall Street estimates, boosted by a series of cost-cutting measures. The transports also rally after United Airlines also beat estimates. According to Thomson Reuters, 79% of the S&P 500 companies that had reported through Wednesday beat estimates which is a healthy sign.

Thur & Fri Action:

Stocks fell on Thursday after Taiwan Semiconductor Manufacturing ($TMSC) said it lowered guidance which sent a slew of tech stocks lower. TMSC is a big chip supplier to Apple and other tech companies so the fact that they lowered guidance was seen as a negative sign for the space. Elsewhere, rising interest rates came back into the picture as the yield on the 10-year Treasury note broke above 2.9%. Stocks fell on Friday after the Democrats sued Trump, Russia and Wikileaks for interfering with the 2016 election.

Market Outlook: Bulls Are Fighting

The market is trading between important resistance (2018’s high) and important support (February’s low). Until either level is broken, I have to expect this sloppy, sideways action to continue. On the downside, the big level of support to watch is February’s low and the 200 DMA line. For now, as long as those levels hold, the longer-term uptrend remains intact. Conversely, if those levels break, look out below. On the upside, resistance is now 2018’s high.  As always, keep your losses small and never argue with the tape. Want 1-0n-1 Coaching Lessons From Adam? Click Here To Learn More

13 Apr
Daily Market Commentary

Week-In-Review: Stocks Bounce As Earnings Season Begins

Stocks Bounce As Earnings Season Begins

Stocks rallied nicely last week as earnings season officially began. Delta Airlines, BlackRock, JP Morgan Chase, Citigroup, and Wells Fargo, were just some of the big names that reported earnings last week. Surprisingly, they beat estimates but all traded lower on Friday. Two weeks ago, the bulls showed up and defended important support (200 DMA line) which set the stage for a nice rally into near term resistance (50 DMA line). On cue, stocks turned lower on Friday as the major indices bumped into their respective 50 DMA lines. For now, that is now the near term trading range. Stepping back, longer term resistance is 2018’s high and longer term support is 2018’s low. By definition, until either level is breached we have to expect this new sideways trading pattern to continue. 

Mon-Wed Action:

On Monday, stocks opened sharply higher after the U.S. softened its stance on the impending trade war with China. Treasury Secretary Steven Mnuchin said on Sunday he does not expect a trade war between the U.S. and China to take place. It should be noted that two days earlier, Mnuchin told CNBC’s “Power Lunch” that a trade war between the two largest economies was possible. Elsewhere, tech stock bounced as shares of Facebook, Amazon, Apple and Alphabet all jumped nicely. Technically, the bulls showed up and defended the longer-term 200 DMA line which is the first important level of support to watch. The next important level is Feb’s low. But stocks gave back most of their gains before the close when news spread that the FBI raided President Trump’s Attorney’s office. On Tuesday, stocks rallied nicely after China’s President Xi softened his stance about the impending trade war. Elsewhere, Mark Zuckerberg testified on Capitol Hill regarding the data breach. Stocks fell on  Wednesday after Trump canceled his trip to South America and said he would consider a military response to the situation in Syria. Trump said, “Russia vows to shoot down any and all missiles fired at Syria. Get ready Russia, because they will be coming, nice and new and ‘smart!’ You shouldn’t be partners with a Gas Killing Animal who kills his people and enjoys it!”

Thur & Fri Action:

On Thursday, stocks rallied nicely after Trump tweeted and said, “Never said when an attack on Syria would take place. Could be very soon or not so soon at all! In any event, the United States, under my Administration, has done a great job of ridding the region of ISIS. Where is our “Thank you America?” That helped set the stage for a nice rally on Wall Street. Elsewhere, Delta Airlines and BlackRock both rallied after reporting earnings. Stock were quiet on Friday after JP Morgan Chase, Citigroup, and Wells Fargo all reported stronger-than-expected earnings.

Market Outlook: Bulls Defend Support

The market is trading between important resistance (2018’s high) and important support (February’s low). Until either level is broken, I have to expect this sloppy, sideways action to continue. The big level of support to watch is February’s low and the 200 DMA line for the major indices. 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 1-0n-1 Coaching Lessons From Adam? Click Here To Learn More

06 Apr
Daily Market Commentary

Week-In-Review: Bulls Defend Support…For Now

Bulls Defend Support…For Now

This was an important week on Wall Street. The Bulls showed up and defended the longer-term 200 DMA line which is important support for the major indices. Stocks ended lower last week as fear spread that a trade war may derail the global economy and adversely affect corporate earnings. This is a critical time for the market because if support can’t hold, then odds favor this turns into a large top and we could easily fall into a long-overdue bear market. For now, the next two important areas to watch are the 200 DMA lines and then Feb’s low. To keep it really simple, as long as support holds, we are likely to move sideways or higher. Conversely, if Feb’s lows are breached then odds favor we are going to fall the dreaded -20% which would signal a bear market. The next big catalyst is earnings season which is supposed to be strong. So if earnings fail to impress- that could also hurt the market. 

Mon-Wed Action:

Stocks were smacked hard on Monday causing the market to experience its worst start to the second quarter since the Great Depression. At one point, the Dow was down over 700 points but, thanks to a late day rally, ended down over 500 points. That may have been an important near term low for the market as many bulls finally capitulated and the market successfully tested important support (200 DMA line for the S&P 500). Stocks snapped back and rallied over 300 points on Tuesday as investors stepped in and defended important areas of support. In other news, Spotify finally IPO’d and it came out higher than the expected range. One should be careful with high profile IPOs because most of them do not act well on Day 1. Wednesday was an important day on Wall Street because overnight China announced they would issue tariffs on 106 U.S. products and futures fell over 500 points. On cue, the bulls showed up and defended support helping the market close higher by over 200 points.

Thur & Fri Action:

On Thursday, stocks continued to bounce as the bulls showed up and added to Wednesday’s rally. On the economic front, weekly jobless claims came in at 242,000, higher than the Street’s estimate for 225,000. Even the slight uptick was written off because claims are still near their lowest levels since the 1970s. Before Friday’s open, the Labor Department said U.S. employers added 103k new jobs which missed estimates for 175k. Separately, the threat of the trade war increased after the rhetoric between Beijing and the White House intensified.

Market Outlook: Bulls Try To Defend Support

The market is trading between important resistance (2018’s high) and important support (February’s low). Until either level is broken, I have to expect this sloppy, sideways action to continue. The big level of support to watch is February’s low and the 200 DMA line for the major indices. 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 1-0n-1 Coaching Lessons From Adam? Click Here To Learn More

04 Apr
Media Quotes

Reuters Asked Adam About The Stock Market

Stocks Opened Lower As China Retaliates

9:45am

* Indexes open down: Dow 1.02 pct, S&P 0.71 pct, Nasdaq 0.81 pct

* S&P opens below 200-day moving avg; Nasdaq in red for the year

* Industrials hit: Boeing down 4 pct; Caterpillar down 3 pct

* FAANG stocks down 0.3 to 2.9 pct; Chipmakers also drop (Updates prices, adds more comment)

By Sruthi Shankar

April 4 (Reuters) – The Dow Jones Industrial Average dropped just over 1 percent on Wednesday as big U.S. manufacturers and chipmakers bore the brunt of a deepening trade conflict between China and the United States.

Boeing and Caterpillar led the slide as a raft of major U.S. firms saw millions knocked off share values by the announcement of tariffs on $50 billion worth of the goods exchanged daily between the world’s two largest economies.

President Donald Trump’s claim on Twitter that the two countries were not in a trade war did little to cool fears that have been building since the White House launched new charges on steel and aluminum a month ago.

The S&P 500 opened below its 200-day moving average, a key technical level, and the Dow lost as much as 510 points before recovering some ground to stand 250 points lower at .

“The level of uncertainty has definitely surged,” said Adam Sarhan, Chief Executive of 50 Park Investments in New York. “When you see China retaliate stronger than the U.S. that’s a very strong signal that they mean business.”

At 10:48 a.m. ET, the Dow was down 1.02 percent at 23,787.67. The S&P 500 fell 0.71 percent to 2,595.96 and the Nasdaq Composite dropped 0.81 percent at 6,885.06.

The declines were broad based, with 23 of the Dow’s 30 components lower. The industrials index’s 1.4 percent slide was the most among the 11 major S&P sectors, as has been the case since the trade war fears surfaced.

While Washington’s list covered many obscure industrial items, Beijing’s covers 106 key U.S. imports including soybeans, planes, cars, and chemicals.

Shares of Boeing, the single largest U.S. exporter to China, tumbled 3.8 percent. Caterpillar fell 3 percent.

Ford, General Motors and Fiat Chrysler fell between 0.2 percent and 0.8 percent as investors weighed the competing impacts on their global operations and production.

While manufacturers were the bigger losers as a group, the technology sector’s 1.3 percent drop weighed the most on the market.

Major tech names Apple and the FANG group – Facebook, Amazon, Netflix and Alphabet were down between 0.3 percent and 2.9 percent.

Chipmakers, many of which have the highest revenue exposure to China among S&P 500 companies, also fell. 28 of the 30 constituents of the Philadelphia semiconductor index were lower.

“As a sector, technology has the most to lose from a world in which global trade is restricted and of course, some of the subjects of the tariffs, will also be hit,” said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey.

Among the few bright spots was housebuilder Lennar, whose shares jumped 6.8 percent after it reported quarterly revenue that beat estimates as it sold more homes at higher prices. (Reporting by Sruthi Shankar in Bengaluru; Editing by Savio D’Souza and Patrick Graham)

Link:

https://www.reuters.com/article/usa-stocks/us-stocks-dow-falls-1-pct-as-china-u-s-trade-spat-intensifies-idUSL4N1RH4M4