Week-In-Review: Another Record Setting Month On Wall Street

Byinfo@50park.com

Another Record Setting Month On Wall Street

The market remains exceptionally strong as the bulls remain in clear control and stocks refuse to fall in a meaningful fashion. Every time the market hints at pulling back, almost immediately, the bulls show up (buy the dip crowd) and send stocks soaring. The two largest “down” days (that were significant) this year happened on June 9th and then last Wednesday, November 27, both in the Nasdaq. Both those days happened after a big rally and then the Nasdaq, and other big cap growth stocks, sold off in heavy volume. Normally, that mark a near term high but not this market. Stocks soared on Thursday and the Dow topped 24,000 for the first time ever which was a few days after the S&P 500 topped 2,600. At this point, the market is very extended to the upside and way overdue to pullback. Until it does, weakness should be bought, not sold.

Mon-Wed Action:

Stocks ended mixed on Cyber Monday as investors waited to see the results of the first real holiday shopping weekend of the season. So far, the data showed online Black Friday sales rose close to +17% from the same period last year. Meanwhile, Cyber Monday sales also rose double digits vs 2016 numbers.

Stocks rallied sharply on Tuesday, with the Dow jumping 255 points, after the U.S. Senate moved closer to passing tax reform. Goldman Sachs expects a 50% chance tax reform is accomplished this year and an 80% chance it gets done in 2018. Stocks ended mixed on Wednesday but the Nasdaq, and a slew of growth stocks, fell hard and dragged the market lower. Before the open, the government released the second estimate of US Q3 GDP which came in at +3.3%, beating estimates for a gain of +3.2%. In other news, Bitcoin surged above 11,000 24 hours after it broke above 10,000. If that’s not a climax run, I don’t know what is.

Thur & Fri Action:

Stocks soared on Thursday, with the Dow rallying over 300 points after it looked like the Senate would pass the tax cut. After the close, the Senate pushed the vote back because they were still lobbying some members. Stocks fell on Friday after a few negative headlines emerged regarding the ongoing Russia investigation.

Market Outlook: Bulls Are Strong

The bulls are back in control and the market remains very strong. As always, keep your losses small and never argue with the tape. Get Our Free e-Book: Learn How To Buy Leading Stocks…EARLY. Get It Here…

Similar Posts

  • Earnings Season Begins; Stocks Fall

    Byinfo@50park.com

    On Monday, we penned, “After three strong weeks of gains, the market appears to be showing signs that a near-term pullback might be in the cards. A slew of stocks negatively reversed (opened higher and closed lower) on Monday, which suggests a change in trend may unfold.” Therefore, Tuesday’s pullback was somewhat expected as the major averages (and leading stocks) pause to consolidate their recent gains. Is the rally over? No, but all we have to do is be cognizant of the fact that a near term pullback may occur and then trade accordingly. From our point of view, the current, 45-week rally, remains intact as long as the major averages continue trading above their respective 50 DMA lines. Until those levels are breached, the bulls deserve the benefit of the doubt.

  • Stocks Pullback To Consolidate Monday's Move

    Byinfo@50park.com

    At this point, the Dow Jones Industrial Average, S&P 500, and the NYSE Composite indexes have all traded above resistance at their long term 200-day moving average (DMA) lines and recent chart highs. The tech-heavy Nasdaq Composite and small-cap Russell 2000 index remain slightly below their recent chart highs. However, the fact that all of the major averages are trading above their respective 2-month downward trendlines bodes well for this five week rally. In order for a new leg higher to begin, all the major averages must close and remain above their respective resistance levels. Remember that the window remains open for for high-ranked stocks to be accumulated when they trigger fresh technical buy signals. Trade accordingly.

  • Stocks Dive On Tepid Housing Data

    Byinfo@50park.com

    The technical action in the major averages continues to weaken alongside the latest round of tepid economic data. Currently, resistance for the the major averages are their 50 DMA lines, then their longer term 200 DMA lines. It is also disconcerting to see the action in several leading stocks remain questionable as evidenced by the dearth of high-ranked leaders breaking out of sound bases.
    From our perspective, Monday’s negatively reversal coupled with Tuesday’s ugly distribution day effectively ended the latest rally attempt which emphasizes the importance of remaining cautious until the rally is back in a confirmed uptrend. Put simply, we can expect this sideways/choppy action to continue until the market breaks out above resistance or below support (recent chart lows). The first scenario will have bullish ramifications while the second will be clearly bearish. Trade accordingly.

Leave a Reply

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