Week-In-Review: Stocks End Week Mostly Lower Amid Trade Woes

Dow Flirts With 200 DMA Line

The major indices ended mostly lower last week amid the ongoing trade woes. In the first half of the week, President Trump said he will consider adding tariffs on nearly $200 billion worth of Chinese goods. A few days later, China responded by saying, the US has “delusions” regarding the trade war. It is important to put the on going trade dispute between the two economic powerhouses in the proper context. Here are some facts: The US economy is roughly $19T and currently, China only imports $130B of goods from the US. Meanwhile, the US imports $505B from China.  That’s why the administration is doing what it is doing. From my point of view, the only thing that matters is what does all this mean for capital markets? Stepping back, this is mostly noise until we see definitive action. Recently, the Dow has been lagging because it is the most sensitive to the ongoing trade woes. So far, the market – and leading stocks- continue acting well and that tells me everything I want to know. In the short-term the major indices are extended and are pulling back. They key now is to analyze the health of this pullback then go from there. Keep in mind we are approaching the end of the month and the end of the quarter which usually has a slightly upward bias. 

Mon-Wed Action:

Stocks ended mixed on Monday as the Dow and S&P 500 fell but the Nasdaq managed a small gain. The market opened lower after concern grew regarding a potential global trade war. After the close, President Trump said he is prepared to announce tariffs on $200B worth of Chinese goods. Overnight, global equity markets plunged and stocks opened lower on Tuesday. Once again, by the close, the market ended in the middle to upper half of its range which is a somewhat bullish sign. Wednesday was a relatively quiet session. Stocks opened higher on Wednesday but the Dow quickly gave back its gains and turned lower. Separately, Disney raised its bid for Twenty-First Century Fox assets to $38 per share, or $71.3 billion. That was higher than Comcast’s offer of $65 billion in cash for the Fox assets which include FX, Star TV and stakes in Sky.

Thur & Fri Action:

Stocks fell on Thursday on lingering trade concerns. The Dow Jones Industrial Average fell by nearly 200 points and extended its losing streak to 8 days. The last time the Dow fell 9 consecutive days was 40 years ago. Separately,
e-commerce stocks fell on Thursday, after the U.S. Supreme Court allowed states to collect taxes from retailers that do not have a physical presence there. That is a big game changer for the entire e-commerce industry. Stocks were quiet on Friday with the only big headline coming from OPEC. OPEC decided to raise production slightly to help with the oil market.

Market Outlook: Bullish Action

The major indices are pulling back after the Nasdaq and Russell 2000 both just hit fresh record highs. The Dow & S&P 500 are lagging as they are more impacted by global trade woes. On the downside, the big level of support to watch is the 200 DMA line and 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. Free Special Report: Want A Bargain? 3 Cheap Stocks That Are About To Breakout

Week-In-Review: Stocks End Week Mixed As Trade Woes Divide Wall Street

Stocks End Week Mixed As Trade Woes Divide Wall Street

The split tape I mentioned over the last few weeks continues as the Nasdaq and Small-Cap Russell 2000 hit fresh record highs while the S&P 500 and Dow Jones Industrial Average lag. The reason is simple: there remains a lot of uncertainty with respect to how this ongoing “trade war” that is brewing may unfold. The Dow and S&P 500 are more sensitive to these headlines while the Nasdaq and the R2k are less sensitive. Elsewhere, it was a big week for global central banks as they are all (slowly) moving away from the ultra-easy money era since the 2008 financial crisis. To be clear, they are still adopting an easy money stance, but the ultra-easy money period is now behind us (at least until the next recession or bear market).

Mon-Wed Action:

Stocks ended slightly higher on Monday after the G-7 meeting ended and Trump headed to Singapore for the N. Korea Summit. Overnight, Trump and Kim signed a historic deal and the market barely moved. On Tuesday stocks were quiet as the world waited for a busy week from global Central Banks. Separately, Tesla said it will slash 9% of its workforce and Elon Musk acknowledged that the company will have to turn a profit “some day.” Stocks fell on Wednesday after the Federal Reserve raised rates and signaled two more rate hikes may happen later this year.

Thur & Fri Action:

Stocks ended mixed on Thursday after the ECB slowly moved away from its ultra-easy money stance and President Trump signaled he may slap tariffs on China. By Friday’s open, $50 billion of tariffs were announced and now the world is waiting for China to respond. That concern largely dragged the market lower on Friday.

Market Outlook: Bullish Action

The small-cap Russell 2000 and Nasdaq both hit new highs which is bullish for the broader market. The other indices are acting well and still 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 the 200 DMA line and 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. Free Special Report: Want A Bargain? 3 Cheap Stocks That Are About To Breakout

Week-In-Review: Stocks End Week Higher Ahead of G-7 Meeting

Nasdaq Hits A New Record High Ahead Of The G-7 Meeting

The Nasdaq hit a fresh record high and officially ended its four month “correction.” That came shortly after the small-cap Russell 2000 ended its correction and hit fresh record highs. Clearly, those are the two areas of strength as they were the first indices to breakout and hit fresh record highs. Separately, the Dow Industrials and the S&P 500 are still trading below their 52-week highs but appear to be on track to hit new highs soon. Right now, we are seeing a classic case of a great mini-rotation -where the leading indices pause to digest the recent/strong rally while the weaker ones play catch-up. It is important to keep in mind that the leading indices are extended right now and way overdue to pullback. I would like to see a nice quiet light volume pullback over the next few weeks but the market doesn’t do what I want it to. Separately, the end of the month and quarter are around the corner and they usually have a slight upward bias.

Mon-Wed Action:

Stocks rallied nicely on Monday after a few large tech stocks hit fresh record highs. Shares of Apple, Netflix, Amazon, Nvidia, and Microsoft, all hit new highs which helped lift the tech-heavy Nasdaq higher and the broader indices as well. In other news, earnings season has largely died down and, on average, Q1 earnings largely beat estimates by a very nice margin. Stocks were relatively quiet on Tuesday as the Nasdaq hit a fresh record high and trade concerns weighed on the broader market, specifically financials. China said that it will buy close to $70B of goods from the US if the tariffs are not imposed. Elsewhere, rumor spread that the White House is open to the idea of creating a new trade deal with Mexico and Canada to get out of NAFTA. Stocks rallied nicely on Wednesday helping the benchmark S&P 500 breakout of its recent handle pattern. The action remains healthy as other areas of the market that had been under pressure perked up: financials, housing, biotech and healthcare, just to name a few.

Thur & Fri Action:

Stocks were mixed on Thursday as the Dow led while the Nasdaq, S&P 500 and small-cap Russell 2000 ended lower. Separately, Warren Buffett and Jamie Dimon publicly said companies should stop reporting quarterly guidance because it is “too short term” and hurts long-term investors. Stocks were relatively quiet on Friday ahead of the G-7 meeting.

Market Outlook: Bullish Action

The small-cap Russell 2000 hit a new high which is bullish for the broader market. The other indices are acting well and still 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 the 200 DMA line and 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. On the upside, resistance is now 2018’s high.  As always, keep your losses small and never argue with the tape. Free Special Report: Want A Bargain? 3 Cheap Stocks That Are About To Breakout

Week-In-Review: Stocks End Busy Week Mostly Higher

Stocks End Busy Week Mostly Higher

Once again, the market had every chance in the world to fall last week and the fact that it didn’t is very bullish. Even though it was a shortened holiday week it was a busy week of headlines nonetheless. The market opened on Tuesday with a big decline after the political turmoil in Italy was announced. Then stocks rebounded nicely on Wed, fell on Thurs and rallied nicely on Friday after the jobs report was announced. The Dow Jones Industrial Average ended slightly lower last week but near its highs for the week which is bullish sign. The small-cap Russell 2000 continues to lead its peers followed by the tech-heavy Nasdaq composite. For now, the action remains very healthy across the board and near-term support remains the 50 DMA line. As long as that level is defended, odds favor higher prices will follow. To be clear, the bulls remain in clear control until any serious selling shows up.

Mon-Wed Action:

Stocks were closed on Monday in observance of Memorial Day. Stocks fell nearly 500 points on Tuesday after fear spread regarding the political situation in Italy. Over the long weekend, news spread that two political parties in Italy may not be able to build a coalition which sent the euro -and global stock markets- sharply lower. If Italy can’t reach a deal the country will be forced into another shotgun election and the new party could vote to leave the EU. Stocks rebounded sharply on Wednesday after the Italian two-year bond yields fell to 1.72 percent from 2.1 percent, which erased much of Tuesday’s climb. Separately, the small-cap Russell 2000 hit a fresh record high.

Thur & Fri Action:

On Thursday, stocks fell hard after President Donald Trump issued tariffs on the European Union, Mexico and Canada, sparking fears the U.S. could enter a trade war with some key allies. Once again, the selling was short-lived because stocks bounced back sharply on Friday and closed mostly higher for the week. Before Friday’s open, stocks rallied after Trump tweeted that he is looking forward to the jobs report -before the report was released. Typically, the President is breifed on the number the night before so stock futures rallied sharply after the tweet. Indeed, the report positive as U.S. employers added 223,000 new jobs last month and the unemployment rate fell to 3.8%, both readings beating estimates.

Market Outlook: Bullish Action

The small-cap Russell 2000 hit a new high which is bullish for the broader market. The other indices are acting well and still 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 the 200 DMA line and 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. On the upside, resistance is now 2018’s high.  As always, keep your losses small and never argue with the tape. Free Special Report: Want A Bargain? 3 Cheap Stocks That Are About To Breakout

Week-In-Review: Bullish Action Ahead Of The Long Weekend

Bullish Action Ahead Of The Long Weekend

The market had every chance in the world to fall last week and the fact that it didn’t is very bullish. Remember, it’s not the news that matters but how the market reacts to the news. When a market doesn’t fall on bearish news that is a bullish event and when a market can’t rally on bullish news that is a bearish event. Right now, the small-cap Russell 2000 is trading at a new all-time high which is also bullish for the broader market. The other popular indices are all tracing out a bullish “handle” just above their respective 50 DMA lines. Near-term support is the 50 DMA line and as long as that level is defended, odds favor higher prices will follow. Moreover, one or two “good” days and the market can easily begin a new leg higher. The bulls remain in clear control until any serious selling shows up. 

Mon-Wed Action:

Stocks opened higher on Monday after Treasury Secretary Steven Mnuchin said the so-called trade war with China is placed ‘on hold.’ The U.S. suspended its threat to impose tariffs on $150 billion in Chinese imports while the negotiations with China continue. President Trump does have the option to impose the tariffs if he’s not happy with the way things are moving along. On Tuesday, stocks fell 200 points after President Trump said the North Korea summit may not happen and that he was not happy with China’s trade talks. In other news, retailers were mixed to mostly lower after Kohl’s reported earnings. On Wednesday, stocks fell at the open but turned higher after the Fed minutes were released. Overnight, the so-called “risk-off” trade spread in Asia and the Turkish Lira plunged. Buyers showed up in the U.S. and protected support (50 DMA line for the major indices). Additionally, the Fed minutes came out and they were more dovish than expected and that helped lift the market. The Fed said it is willing to let inflation run above 2% for a while which is its way of saying, “easy money is here to stay.”

Thur & Fri Action:

On Thursday, stocks fell after Trump canceled the meeting with North Korea and the Commerce Department began looking into importing auto parts. In a bullish turn of events, stocks rallied back mid-day and the small-cap Russell 2000 actually closed higher. The fact the market didn’t fall on this bearish news is a bullish event. Remember, it’s not the news that matters, but how the market reacts to the news. So far, the action remains bullish. Stocks were quiet on Friday ahead of the long holiday weekend.

Market Outlook: Bullish Action

The small-cap Russell 2000 hit a new high which is bullish for the broader market. The other indices are tracing out a bullish handle and 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 the 200 DMA line and 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. On the upside, resistance is now 2018’s high.  As always, keep your losses small and never argue with the tape. Free Special Report: Want A Bargain? 3 Cheap Stocks That Are About To Breakout

Week-In-Review: Stocks End Week Mixed As Small Caps Hit New Highs

Stocks End Week Mixed As Small Caps Hit New Highs

The market ended mixed last week as the small-cap Russell 2000 hit a fresh record high. The fact that small-caps hit new highs last week is bullish and bodes well for the broader indices. In the short-term, the other popular averages are pausing to digest a recent/strong rally after important support was defended near the longer-term 200 DMA line a few weeks ago. It would be very healthy to see the major indices quietly pullback into their shorter-term 50 DMA line (formerly resistance, now support) before beginning their next leg higher. The bulk of earnings are now behind us and investors are now looking forward to the next bullish catalyst. 

Mon-Wed Action:

Stocks opened higher on Monday after President Trump pledged on Sunday to help Chinese technology firm ZTE Corp “get back into business, fast.” That helped allay concerns about trade tensions between the world’s two largest economies. Meanwhile, the small-cap Russell 2000 flirted with new record highs intra-day before pulling back and closing near its 2018 high. On Tuesday, fell after investors digested the latest round of economic and earnings data. Before the open, Home Depot missed estimates and that dragged the Dow and broader averages lower. Shortly thereafter, Retail Sales came in at +0.3%, which matched estimates. Separately, the home builder confidence came in at 70, beating estimates for 69. On Wednesday, stocks were mostly higher after Macy’s jumped after reporting earnings. The retail giant helped a slew of other retail stocks rally and that lifted the broader indices. Separately, the Small-Cap Russell 2000 broke out of its latest base and quietly hit a fresh all-time high.

Thur & Fri Action:

On Thursday, stocks closed slightly lower after Trump said trade talks between the U.S. and China may not be successful. The U.S. and China kicked off the second round of trade talks and trump said, “China has become very spoiled. The European Union has become very spoiled. Other countries have become very spoiled, because they always got 100 percent of whatever they wanted from the United States.” That heightened concerns about the ongoing trade war between the U.S. and China. Stocks were quiet on Friday as investors waited to see what would happen on the geo-political front between China and North Korea.

Market Outlook: Bulls Defend Support

The small-cap Russell 2000 hit a new high which is bullish for the broader market. The other indices are 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. Free Special Report: Want A Bargain? 3 Cheap Stocks That Are About To Breakout

Week-In-Review: Stocks Are Back In The Black For 2018

Stocks Are Back In The Black For 2018

The bulls regained decisive control of the market last week after the major indices turned positive for the year and jumped above near-term resistance. The Dow & S&P 500 both jumped above near-term resistance (50 DMA line) which was highlighted several times in this report for you in recent months. Going forward, the bulls want the 50 DMA line to become support as the market is now getting a little extended in the short-term. In other (bullish) news, it is very positive to see the small-cap Russell 2000 rally all the way back up to it’s 2018 high! Typically, small-cap stocks are a good barometer for broader risk appetite and the fact that the Russell is back at new highs bodes well for the other popular averages. 

Mon-Wed Action:

Stocks rallied on Monday as investors prepared for another busy week of earnings. Over the weekend, thousands of investors flocked to Omaha to attend Warren Buffet’s annual meeting. Buffet outlined succession plans and discussed a few of his bigger investments such as Apple and Wells Fargo. On Tuesday, stocks opened lower but closed flat after President Trump pulled out of the Iran deal. In corporate news, Comcast upped its bid to buy assets from Fox. On the earnings front, several high profile companies reported earnings and – so far – most continue to beat estimates. After the bell, Disney reported and the stock was flat. Disney said it is still interested in buying the fox assets as it moves more of its content to market directly to the consumer. Stocks opened higher on Wednesday after the latest round of earnings were released. Technically, the S&P 500 and Dow Jones Industrial Average both tried trading above their respective 50 DMA lines which have served as near-term resistance in recent weeks.

Thur & Fri Action:

On Thursday, stocks rallied nicely as the market digested the latest round of earnings and economic data. On average earnings continued to beat estimates which is a healthy sign. On the economic front, inflation came in less than expected which eased pressure on the Fed to raise rates in the future. That is a welcomed sign for the bulls. Stocks were relatively quiet on Friday as the market digested a big run off the 200 DMA line over the past week.

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. 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. Not Happy With Your Results On Wall Street? Find Out What You Are Doing Wrong

Week-In-Review: Stocks End Flat After Support Was Defended

Stocks End Flat After Support Was Defended

It was another volatile week on Wall Street as investors digested a slew of economic and earnings data. Apple was the big standout winner last week as the stock shot up to new highs after reporting earnings and legendary investor Warren Buffet announced he was increasing his position in the stock. In other news, the bulls were happy after The Federal Reserve did not raise rates last week. Finally, the week ended on a positive note when the unemployment rate fell to only +3.9% which is the lowest rate since 2000. Remember, the stock market topped out in March 2000, so just some food for thought was we start seeing strong data in the weeks and months ahead. Remember, its not the news that counts, but how the market reacts to the news. For investors, the most important event that happened last week was that the bulls showed up and defended the longer-term 200 DMA line which is near term support. It is also encouraging to see the Russell 2000 and the Nasdaq composite both get above their respective 50 DMA lines which has served as near term resistance in recent weeks. Going forward, as long as the 200 DMA line is defended we will likely rally nicely from here.

Mon-Wed Action:

Stocks were slightly lower on Monday which was the last trading day of April. Since the beginning of earnings season, the market is up only 1% which pales in comparison to 20% gains on the earnings front. Telecom stocks fell after news broke on Sunday that T-Mobile agreed to buy Sprint for $26.5 billion. A lot of people were concerned that the deal would be blocked by the government. Technically, the market hit a wall near the 50 DMA line and began pulling back. Stocks ended mixed on Tuesday as investors waited for Apple to report earnings after the close. The Dow and the benchmark S&P 500 ended lower while the tech-heavy Nasdaq ended slightly higher. The Dow fell over 150 points on Wednesday after the Fed held rates steady but said inflation remains a concern. Remember, the Fed has a dual mandate, help the economy grow (jobs) and keep inflation under control. So, market participants are worried that if inflation picks up, the Fed will need to raise rates more aggressively which may hurt the market and the broader economy. Even though the market ended lower on Wed, Apple rallied.

Thur & Fri Action:

On Thursday, the Dow erased a 400 point loss as investors digested a slew of earnings data and the bulls showed up and defended the 200 DMA line. Overnight, the big news came from Elon Musk when he told analysts that they are “boring” and instead spent a lot of time answering “crowd-sourced” questions from a 25 year old YouTube personality. That was bizarre and the stock fell sharply on Thursday at the open. Stocks were quiet on Friday as investors digested the latest jobs report. Stocks rallied nicely on Friday as investors cheered the latest round of earnings and the monthly jobs report. Before Friday’s open, the Labor Department said U.S. employers added 164k, missing estimates for 191k. The big news came when the unemployment rate fell to only +3.9%, which was the lowest reading since 2000.

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. 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

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

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