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

Similar Posts

  • Stocks End Shortened Holiday Week Lower

    Thursday, April 05, 2012 Stock Market Commentary: Stocks and other risk assets were relatively quiet on Thursday as the world waited for Friday’s payrolls report to be released and digested the latest no QE3 decline.Technically, it is very encouraging to see U.S. equity markets continue to outperform their peers on a relative basis. For most…

  • Stocks Get Smacked On Lackluster Economic Data

    Technically, the fact that both the Dow Jones Industrial Average and the S&P 500 Index continue falling after closing below their respective 200-day moving average (DMA) lines earlier this week suggests the market may retest its recent lows. Looking forward, the 50 DMA line may act as stubborn resistance and this month’s lows should act as support. Since the June 15, 2010 follow-through day (FTD), this column has steadily noted the importance of remaining very selective and disciplined because all of the major averages are still trading below their downward sloping 50-day moving average (DMA) lines. This week’s sell-off simply confirms that view. Trade accordingly.

  • Week In Review: Stocks Fall Ahead of The Long Weekend

    Another Down Week On Wall Street Stocks ended lower last week ahead of the long holiday weekend. On Friday 8/28 we wrote, “Typically, massive sell-offs do not recover overnight. Additionally, massive selloffs  followed by record volatility leads to lower, not higher, prices – especially when they occur in aging bull markets. Right now, nearly every major market around…

  • Relatively Flat Week on Wall Street

    The action since this rally was confirmed on the September 1, 2010 follow-through day (FTD) has been very strong. Looking forward, the window is open for disciplined investors to carefully buy high-ranked stocks, while many pundits are expecting that markets may consolidate following recent gains. It was encouraging to see the bulls show up and defend support (formerly resistance) in recent weeks. The next level of support for the major averages is their respective 200-day moving average (DMA) lines while the next level of resistance is their respective April highs. Trade accordingly.

  • Rally Ends; Stocks Smacked

    Market Outlook- Market In A Correction:
    The market is back in a correction after another failed follow-through day on Tuesday, June 21, 2011. Now that we are back in a correction, defense remains the best offense. The next level of support for the major averages are their respective 200 DMA lines and then their March lows. The next level of resistance for the major averages is their respective 50 DMA lines. Trade accordingly.
    For those of you that are interested, the S&P 500 hit a new 2011 high on May 2, 2011. Two days later, on Wednesday, May 4, 2011, we turned cautious and said “The Rally Was Under Pressure” (read here). Then on Monday, 5.23.11, we changed our outlook to “Market In A Correction” (read here). On Monday, June 6, 2011 we pointed out that the S&P 500 violated its 9-month upward trendline (read here) and reiterated our cautious stance. On June 21, 2011 we changed our Market Outlook to a “Confirmed Rally” after the latest FTD was produced. Two days later, on Thursday, June 23, 2011, our outlook changed to “Market In A Correction” after the market sold off hard on renewed economic woes. If you are looking for specific help navigating this market, please contact us for more information.
    Stock Market Research?
    Global Macro Research?
    Want To Follow Trends?
    Learn How We Can Help You!

Leave a Reply

Your email address will not be published. Required fields are marked *