Stocks Eyeing Gains For The Second Week In A Row

Hello traders everywhere. After disastrous May during which major indexes lost more than 6%, U.S. stocks have clawed back much of those losses. The recent rally was sparked last week when Federal Reserve officials signaled in interviews and speeches that they are watching the risks of a sharper-than-expected economic slowdown, a sign the central bank might consider lowering interest rates in coming meetings. We are currently 5 days away from the first of those meetings, be sure to keep an eye on the headlines for potential moves in the markets.

Last week the major indexes all gained over 3.8% for the week and this week all three indexes look to post gains for the second week in a row with the S&P 500 posting a gain of +.4%, the DOW +.3%, and NASDAQ follows with a gain +.7%.

The U.S. dollar will post a weekly gain of +.9% after losing -1.07% last week. Gold continues to march higher with a weekly gain of +.6%, but it cannot compete with Bitcoin which bounced back after losing -8% last week, gaining +7% this week.

The only major market that we track to post a weekly loss is crude oil, which will lose -2.5%. That marks the third week out of the last four that oil has had a losing week.

Key Levels To Watch Next Week:

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DOW Surges On Rate-Cut Hopes

Hello traders everywhere. The DOW surged over 300 points Friday on renewed hopes of a July rate cut by the Fed and possibly as much as three cuts by the end of the year. All three of the major indexes will post weekly gains over +4%, which is incredible considering that nothing has changed from last week. We still do not have an agreement in place with both China and Mexico when it comes to trade deals and the threat of increased tariffs is still real.

The Dow is up +4.8% this week. It is also on pace to snap a six-week losing streak. The S&P 500 and Nasdaq were up +4.6% and +4.9% this week capping off an incredible comeback after a soft open to the week and continuous weekly losses. They are all on pace to notch their biggest weekly gains since November of 2018.

Earlier in the week, ADP reported that the private sector added fewest jobs in May since 2010 with jobs only rising by 27,000 last month which was way below expectations of a 180,000 increase. To add to that Labor Department reported on Friday that nonfarm payrolls increased by 75,000 jobs last month, much smaller than the 185,000 additions estimated by economists, suggesting the loss of momentum in economic activity was spreading to the labor market.

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Key Levels To Watch Next Week:

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Betting On Rate Cuts By The Fed

Hello traders everywhere. After opening the week lower on the heels of a week to forget the stocks market bounced back with fury on Tuesday and that move higher has continued today with the S&P 500, DOW and NASDAQ all showing gains as we enter afternoon trading. Reason for the move higher, renewed hopes that the Federal Reserve will lower interest rates soon.

Fed Chair Jerome Powell said Tuesday the central bank will keep an eye on current developments in the economy and would do what it must to "sustain the expansion." Powell did, however, note that the central bank could not determine when or how global trade issues would be settled.

Rate Cuts

Adding fuel to the market speculation that the Fed will cut rates is a lackluster jobs report. ADP reported data that showed that the private sector added fewest jobs in May since 2010, raising the odds that the Federal Reserve would cut interest rates to counter a potential slowdown. Jobs rose by 27,000 last month, according to the ADP National Employment Report, much below expectations of a 180,000 increase.

Key Levels To Watch This Week:

Every Success,
Jeremy Lutz
INO.com and MarketClub.com

DOW Triggers New Red Monthly Trade Triangle

Hello traders everywhere. As we close out the last trading day of May, the only thing that I can think of are tariffs, tariffs, and more tariff talk. Tariffs have certainly been the theme of the month, and without much of a surprise, President Trump closed out the month with the announcement of Mexican tariffs. That news has pushed the major indexes lower on the day with the DOW triggering a new red monthly Trade Triangle indicating that the index is now facing a long-term downtrend.

Washington will impose a 5% tariff from June 10, which would then rise steadily to 25% until illegal immigration across the southern border was stopped, Trump tweeted later on Thursday. Mexican President Andres Manuel Lopez Obrador said he would respond with "great prudence."

Red Monthly Trade Triangle

All three major indexes are down over -6% on the month, the worst losses of the year on a monthly level this year, with the NASDAQ leading the pack with a loss of -7.5%. The DOW is the first of the three to issue a new red monthly Trade Triangle, but the other two are not far behind. In fact, the DOW just set it's longest weekly losing streak in 8 years with 6 straight weeks of losses. The NASDAQ and S&P 500 will both post their 5th weekly loss out of the last 6 weeks. Continue reading "DOW Triggers New Red Monthly Trade Triangle"

All 3 Major Indexes Fall Below 200-Day MA

Hello traders everywhere. For the first time since early March, all three indexes have traded below their 200-Day MA. In fact, they are also trading below their 50-Day MA as well, is this a signal that the stock market is set up to head lower? As we head into afternoon trading the DOW, S&P 500 and NASDAQ are down over -1% on the day with the DOW recovering slightly after being down 400 pts in early trading.

200-Day MA

The 10-year Treasury note yield fell to its lowest level since September 2017 and traded around 2.22%. A portion of the so-called yield curve further inverted as 3-month Treasury bills last yielded 2.353%, well above the 10-year rate. A yield curve inversion is seen by traders as a potential sign that a recession is on the horizon. Continue reading "All 3 Major Indexes Fall Below 200-Day MA"