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

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

Quarter-In-Review: Volatility Returns With A Vengeance

Volatility Returns With A Vengeance

Stocks ended mixed to mostly lower in Q1 2018 as volatility returned with a vengeance. The VIX, a popular measure of market volatility, surged in the first quarter and marked one of its largest quarterly advances in history. The Dow Jones Industrial Average, benchmark S&P 500, and small-cap Russell 2000 all ended the quarter and year in the red as the tech-heavy Nasdaq Composite ended slightly higher. The big concern that I have is that all this “selling” and “volatility” is happening in an aging bull market. Imagine what will happen in the next bear market! The good news is that the fundamental outlook remains bullish as both earnings and the economy are set to grow nicely for the rest of 2018 and 2019. At this point, the next important level to watch is the 200 DMA line then Feb’s low. If those levels are breached we have to expect lower prices to follow. Conversely, if those levels hold, sideways/higher prices will likely follow. It is also important to note that stocks have a slight upward bias during the first two weeks of April. On average, the market tends to rally over 1% in the first two weeks of April which is much stronger than the 0.2% gain experienced during the first two weeks of the other months.

Mon-Wed Action:

On Monday, stocks soared nearly 700 points in one of the largest single-day rallies in history after concern eased about the so-called trade-war between the U.S. and China. The Financial Times reported China has offered to buy more semiconductors from the U.S. to help cut its trade surplus with the U.S and that senior officials from both sides were actively discussing a feasible solution. Technically, the bulls showed up and defended the longer-term 200 DMA line for the S&P 500 which has served as important support since the 2016 election. Stocks opened higher but closed lower on Tuesday as investors digested Monday’s monstrous rally. Tech stocks fell after Reuters reported that Nvidia will temporarily suspend self-driving tests. This came after a few fatal accidents in recent months from self-driving vehicles. Stocks fell on Wednesday as the tech heavy Nasdaq composite fell for a second straight day. Shares of Amazon got smacked after President Trump tweeted that he wants to go after them and change the way they are taxed. Other tech stocks were under pressure as investors sold tech stocks after they recently hit new highs.

Thur & Fri Action:

On Thursday, stocks rallied nicely on the last trading day of the month and the quarter. Shares of Facebook jumped over 4% as value investors stepped in and bought the latest dip. Other tech giants also rallied as investors jumped back into tech stocks after Microsoft announced a major reorganization. Stocks were closed on Friday in observance of Good Friday.

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. 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 Fall Hard; Some Calling For A Big Top

Stocks Fall Hard; Some Calling For A Big Top

Stocks fell hard again last week as fear of a looming trade war between the U.S. and China grew. I think the fear is overblown but the market’s opinion is all that matters. It’s important to keep in mind, all things being equal, investors like to preserve the status quo and fear change (unless it is a massive tax cut). Having said that, the fact that the market is down substantially this month should come at no surprise considering all of the major political headlines we have seen out of D.C. Some people, specifically, the strict chart reading market technicians out there, are calling for a big top. Clearly, this has the potential to turn into a big top but it also has the potential to turn into another bullish base that the market will use to rally from. After a big move (Q1 2016-Q1 2018), it is perfectly normal and healthy to see the market pause for a few quarters to digest the rally. Only time will tell if this will be another bullish base or turn into a big ominous top. The market has 3 bullish fundamental things going for it: 1. Earnings are expected to grow massively, 2. The economy (both U.S. and global economy) is expected to grow & 3. The tax cut is going to kick in which should spark more upward momentum. Stepping back, the next big important levels to watch are 2018’s high (resistance) for the major indices and February’s low (support) for the market. Until either level is broken, by definition, I have to expect this sloppy sideways choppy action to continue. Remember, next week is the last week of the month and quarter which usually has a small upward bias. 

Mon-Wed Action:

On Monday, stocks sold off hard as Facebook and negative political headlines, dragged the market lower. Facebook was the worst-performing stock in the S&P 500, after shares of the social media giant fell after reports said political analytics firm Cambridge Analytica was able to collect data on 50 million people’s profiles without their consent. Separately, President Trump tweeted a lot over the weekend and specifically named Robert Mueller for the first time. Stocks bounced back on Tuesday after Facebook continued to fall and the Fed started its 2-day meeting. Shares of other tech stocks bounced back nicely on Tuesday, helping the market bounce back from deeply oversold levels. On Wednesday, the market was quiet after the Fed raised rates by a quarter point and hiked its expectation for GDP.

Thur & Fri Action:

On Thursday, stocks plunged over 700 points as fear spread regarding a potential trade war with China. The selling intensified into the close as the Dow fell nearly 300 points in the final hour and change of trading. The Trump administration unveiled tariffs designed to punish China for intellectual property theft, imposing about $60 billion in retaliatory charges. Overnight, China said they will impose tariffs on 128 items they import from the U.S.  Stocks fell hard again on Friday as the tough week came to an end.

Market Outlook: Chop City

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 then the 200 DMA line for the major indices. For now, as long as those levels hold, the longer-term uptrend remains intact. 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 Lower On Political Headlines

Stocks End Week Lower On Political Headlines

It has been a very busy time in D.C. In the last few weeks, Trump placed tariffs on Steel and Aluminium, said he may hit China with tariffs, then replaced his: Chief Economic Advisor, The Secretary Of State, The Head of the CIA, and his National Security Advisor might be next. If that wasn’t enough, the government placed sanctions on Russia for meddling with the 2016 election, and Special Counsel Robert Mueller subpoenaed the Trump Organization for his investigation (I might be missing a few headlines). Normally, one would expect the stock market to be down considerably on just anyone of those headlines. Instead, stocks are barely budging. Instead, all the major indices are trading just below their record highs. That, ladies and gentlemen, is a very strong sign that the bulls are still in control of this market. Remember, it is not the news that matters, but how the market reacts to the news. The market only needs one or two big up days and we will be trading at new all time highs again. Stepping back, the next big important levels to watch are 2018’s high (resistance) for the major indices and February’s low (support) for the market. Until either level is broken, by definition, I have to expect this sloppy sideways choppy action to continue. 

Mon-Wed Action:

Stocks opened higher but ended mixed as the market paused to digest the recent (and strong) two week rally. In corporate news, Andrew Liveris announced he will step aside as executive chairman at DowDuPont in April. Jeff Fettig, co-lead independent director at DowDuPont, will take over the role. The Nasdaq continued to lead its peers as the big money continues to flow into tech stocks. On Tuesday, stocks traded between positive and negative territory as traders digested a slew of big headlines. On the political front, President Trump fired Rex Tillerson as Secretary of State and promoted Mike Pompeo, Director of the CIA, to fill that role. Additionally, Trump blocked the Qualcomm acquisition by Broadcom which would have been the largest tech deal in history. Trump cited concerns of national security and QCOM fell hard on the news. Finally, inflation was tame as the consumer price index (CPI) grew by +0.2% in February, which matched estimates. Stocks fell on Wednesday after fear spread that President Trump would slap tariffs on China and they would retaliate in some fashion which could spark a trade war. There are a lot of IFs in that logic. Separately, economic news was lackluster at best with retail sales falling -0.2%, missing estimates for a gain of +0.3%. This was the third straight month that retail sales fell. Additionally, U.S. producer prices increased slightly more than expected in February which sparked some to worry about inflation.

Thur & Fri Action:

On Thursday, stocks ended mixed as investors digested a busy day of data. In the morning, the White House said it was thinking about implementing tariffs on at least $30 billion of Chinese imports. Separately, the Treasury Department said it will issue sanctions again Russia for interfering with the 2016 elections. Then, The New York Times reported that special counsel Robert Mueller subpoenaed Trump’s businesses and the Trump Organization which put downward pressure on stocks. On a somewhat bullish note, despite all these negative headlines, the Dow rallied over 100 points and he Nasdaq and S&P 500 ended with very modest losses. Stocks were relatively quiet on Friday as investors digested a busy week.

Market Outlook: Chop City

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 then the 200 DMA line for the major indices. For now, as long as those levels hold, the longer-term uptrend remains intact. 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: Bull Market Turns 9, Correction Ends As Nasdaq Hits New High

Bull Market Turns 9, Correction Ends As Nasdaq Hits New High

So that was fast! The latest correction is now pretty much over as the Nasdaq Composite and Nasdaq 100 both hit fresh record highs on Friday. The other popular averages are only a few percentage points below their record highs but are quickly marching higher. The Dow Jones Industrial Average, benchmark S&P 500 and small-cap Russell 2000 are just about all back above their respective 50 DMA lines and marching back to their recent 2018 highs. The weaker areas of the market include: The Transports, Utilities, REITs, Housing, Commodities, and to a smaller extend retail. Stepping back, it looks like the market wants to continue racing higher as buyers continue to show up and buy the latest dip. 

Mon-Wed Action:

On Monday, stocks rallied nicely as investors bought stocks after President Trump opened the door to renegotiate NAFTA. In a series of tweets Monday morning, Trump said: “Tariffs on Steel and Aluminum will only come off if new & fair NAFTA agreement is signed,” adding that “Mexico must do much more on stopping drugs from pouring into the U.S. They have not done what needs to be done.”
On Tuesday, stocks were quiet after North Korea said it was open to talking to the U.S. about it’s nuclear program. In other news, Trump tweeted and said people may leave the White House. Separately, rumor spread that Gary Cohen may leave if the Tariffs are imposed. After Tuesday’s close, Gary Cohen officially resigned which sent futures down a few hundred points. As expected stocks opened lower on Wednesday and were under pressure most of the day due to the turmoil in D.C.

Thur & Fri Action:

Stocks rallied on Thursday after President Trump said he would exempt Canada and Mexico and the leave the door open to exempt other countries from the tariffs on Steel and Aluminum. In other news, before the open, the European Central Bank (ECB) held its latest meeting and once again it was largely dovish. Before Friday’s open, the Labor Department said U.S. employers added 313,000 new jobs last month (easily beating the 205k estimate) but wages were weaker than expected.

Market Outlook: Market Bouncing Back

The market is bouncing back after a quick 10% pullback. The big level of support to watch is February’s low and then the 200 DMA line for the major indices. For now, as long as that level holds, the longer-term uptrend remains intact. As always, keep your losses small and never argue with the tape. Want To Learn How To Invest? Sign Up For 1-on-1 Sessions With Adam Sarhan.

Week-In-Review: A Near Term Low

A Near Term Low

Friday appears to be another near term low in the market. The bears emerged victorious last week as the market traced out a series of ominous technical signs. On a weekly basis, the market opened higher and closed lower which is known as a negative reversal. Additionally, the weekly range (high and low) eclipsed the prior week’s range which is known as an outside reversal. Finally, the Dow Industrials and the benchmark S&P 500 both sliced and closed below their respective 50 DMA lines which is not a healthy sign. Fundamentally, the environment still remains bullish which means that the market can still rally after it pauses to digest the recent and very strong two-year rally. Conversely, if February’s lows are breached, odds favor we are heading lower. Stepping back, the two big areas to watch are 2018’s high which is resistance and Feb’s low which is support. By definition, we are moving sideways until either resistance or support is breached. 

Mon-Wed Action:

On Monday, stocks jumped 400 points as the week began with a bang. Over the past two weeks, the Dow has jumped over 2,400 points as stocks bounced back from deeply oversold levels. The so-called “FAANG” stocks — including Facebook, Apple, Amazon, Netflix, and Google-parent Alphabet led the way higher and briefly returned to pre-correction levels. After a two week hiatus, the sellers showed up on Tuesday and sent stocks lower. The market opened higher but closed lower which was a near-term sign of fatigue. Jerome “Jay” Powell, the new Fed Chairman, hinted that the Fed is open to raising rates a few more times in 2018 to combat inflation. Mr. Powell said, “We’ve seen some data that in my case will add some confidence to my view that inflation is moving up to target.” Once again, stocks opened higher on Wednesday but closed lower as sellers regained control of the market and caused the S&P 500 and Dow Industrials to break and close below their respective 50 DMA lines.

Thur & Fri Action:

Stocks fell hard on  Thursday after Jay Powell spent the day testifying on the Hill and President Trump announced tariffs on Steel and Aluminum. Trump said the U.S. will implement a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports starting next week. Stocks opened lower on Friday but reversed course after buyers showed up and quelled the latest bout of selling. Once again, the market fell far very fast and was oversold and due to bounce. That raises the odds that another near term low was placed.

Market Outlook: Market Bouncing

The market is bouncing back after a steep 10% pullback. The big level of support to watch is February’s low and then the 200 DMA line for the major indices. For now, as long as that level holds, the longer-term uptrend remains intact. As always, keep your losses small and never argue with the tape. Want To Learn How To Invest? Sign Up For 1-on-1 Sessions With Adam Sarhan.

Week-In-Review: Stocks End Week Mostly Higher

Stocks End Week Mostly Higher

This was a constructive week on Wall Street, stocks opened lower but closed higher for most of the popular indices. A subtle, yet important, sign of strength is to see a market open lower but close higher in any given period. All things being equal, the longer the period, the stronger the ramification for the market. So, the fact that the major indices opened lower last week, which was shortened holiday week, but closed higher on a weekly basis, is a bullish sign. Separately, if you look at a monthly chart, it is on track to do close to the same thing as next week will be the last week of February. Stepping back, the action is very constructive as buyers quickly showed up and are doing their best to quell the big drop we saw earlier in the month. As long as February’s lows hold, the bulls remain in control of this market.

Mon-Wed Action:

Stocks were closed on Monday in observance of the President’s Day holiday. On Tuesday, stocks fell hard after Wal-Mart ($WMT) gapped down after reporting earnings. The Dow lost 254 points as Wal-Mart suffered its worst day since 1988. Investors were spooked because the yield on the benchmark 10-year U.S. note hit the highest level since 2014. Separately, the yield jumped on the shorter-term two-year note to the highest level in 9 years. On Wednesday, stocks opened higher but closed lower after sellers showed up in the last hour of the day and aggressively sold stocks. At 2pm EST, the Fed released the minutes of its latest meeting which showed policy makers are ready to raise rates a few more times in 2018. Initially, stocks rallied after the minutes were released but closed lower as sellers showed up before the close.

Thur & Fri Action:

Stocks rallied sharply on Thursday as the yield fell on the 10-year note. In corporate news, Chesapeake Energy jumped nearly 20% after reporting earnings while shares of Roku plunged nearly 20% after they released earnings. Separately, shares of Netflix (NFLX) and Amazon.com (AMZN) hit fresh record highs. Stocks rallied on Friday as investors showed up and continued buying stocks to end the week on a positive note.

Market Outlook: Market Bouncing

The market is bouncing back after a steep 10% pullback. The big level of support to watch is February’s low and then the 200 DMA line for the major indices. For now, as long as that level holds, the longer-term uptrend remains intact. As always, keep your losses small and never argue with the tape. Want To Learn How To Invest? Sign Up For 1-on-1 Sessions With Adam Sarhan.

Week-In-Review: Stocks Bounce Back With A Vengeance

Stocks Bounce Back With A Vengeance

Last week I wrote, “The market looks like it just put in a near term low on Friday as the bulls showed up and defended the longer-term 200 DMA line.” That is exactly what happened as stocks soared last week and enjoyed their best week since 2013. I also said, “History shows us that 80% of corrections do not turn into bear markets and 20% do.” and the snap back action suggests this bull market has more room to run. Earnings are expected to grow massively and that is the big bullish catalyst that may keep this bull market alive longer-than-expected. For now, as long as February’s low holds, the bulls remain in control of this market. If support is broken, then this correction will likely get much worse. Conversely, the next level of resistance to watch are the recent highs from late January. If the market takes out those highs, that will be an incredible feat and suggest we are headed higher. Until then, I have to expect more sideways/sloppy action to continue. The market rallied hard last week and could easily pullback to digest that big run. 

Mon-Wed Action:

Stocks soared on Monday as investors scooped up shares at beaten down levels. It is important to note that the previous Friday, institutions showed up and defended the longer-term 200 DMA line which set the stage for this week’s rally. There are two important factors that occur when the market snaps back from deeply oversold levels. First, there is a tremendous amount of short covering (people buy back stock to exit their short positions) and second, the buy the dip crowd shows up and buy stocks at lower prices. Stocks opened lower and closed near their highs as buyers showed up and bought the latest dip. Once again, the market opened lower on Wednesday after inflation ticked higher but the bulls showed up and aggressively quelled the bearish pressure helping it close nicely higher by the close. The big money largely flowed into tech stocks and financials as the market jumped nicely and broke out of a small head and shoulders continuation pattern.

Thur & Fri Action:

The market rallied nicely on Thursday as investors continued buying stocks. Shares of Cisco ($CSCO) rallied nicely after the networking giant reported earnings. Separately, Amazon ($AMZN) said it will team up with Bank of America ($BAC) to offer loans to merchants. Stocks were relatively quiet on Friday as the market enjoyed its best weekly gain since 2013.

Market Outlook: Market Bouncing

The market is bouncing back after a steep 10% pullback. The big level of support to watch is February’s low and then the 200 DMA line for the major indices. For now, as long as that level holds, the longer-term uptrend remains intact. As always, keep your losses small and never argue with the tape. Want To Learn How To Invest? Sign Up For 1-on-1 Sessions With Adam Sarhan.

Week-In-Review: Stock Bounce After Very Tough Week On Wall Street

Stocks Bounce After Very Tough Week On Wall Street

The market looks like it just put in a near term low on Friday as the bulls showed up and defended the longer-term 200 DMA line. In the last two weeks, the market erased the last 10-week’s of gains. That, ladies and gentlemen, is not an insignificant sum and should not be taken lightly. Clearly, that is not aunt Jane and uncle Joe selling, it’s the big institutions. The market went from egregiously overbought to egregiously oversold in a few trading days. The vehemence of this sell-off is worrisome because we are still in a bull market. Imagine, what will happen when we enter a bear market. Stepping back, from a longer-term point of view, a nice steep correction would do wonders to restore the health of this very strong unabated bull run, it is way overdue. History shows us that 80% of corrections do not turn into bear markets and 20% do. So, if this one turns into a bear market, then we will adjust and be ready. History also shows us that markets do not top out overnight, instead tops take time to form. For now, we know the overtly strong bull market has cracked and the crazy “buy at any price” mentality is gone. That may come back, but for now, patience is paramount.

Mon-Wed Action:

The stock market imploded on Monday as sellers regained control of the market. At one point, the Dow was down 1,500 points and the S&P 500 turned negative for the year. That followed Friday’s 666 point shellacking. The financials and energy sectors were the worst performing sectors and dragged the market lower. Ray Dalio, the largest hedge fund manager in the world, tried to calm markets and said these are just ‘minor corrections,’ still lots of cash to buy the dip.” The damage over the past few days has been severe and should not be taken lightly. Stocks jumped 567 points on Tuesday as the bulls tried to regain control. On Wednesday, the Dow jumped nearly 400 points before sellers showed up and sent stocks lower by the close. That was the largest intra-day reversal in 2 years and clearly shows the bears are in control.

Thur & Fri Action:

The Dow plunged 1,000 points on Thursday as sellers aggressively sold stocks all day. To help allay any concerns about the Fed tightening too fast, Chicago Fed President Charles Evans said that the Fed will not raise rates before mid-2018. Interestingly, stocks are falling as earnings continue to be strong. Of the S&P 500 companies that had reported close to 80% had announced better-than-expected earnings which sets the stage for a strong 2018. On Friday, the market opened higher, fell hard, then reversed and closed higher after the bulls showed up and defended the longer-term 200 DMA line. As long as Friday’s lows hold, Friday appears to be a near term low.

Market Outlook: Market Correcting

The market is pulling back and the bulls are trying to defend the longer-term 200 DMA line. For now, as long as that level holds, the longer-term uptrend remains intact. As always, keep your losses small and never argue with the tape. Hit A Wall? Not Sure What To Do In The Market? We Can Help. Don’t Go It Alone, Learn More Here…