Oil had a huge bullish gap last week on the Saudi oil field bombing news, and was volatile the entire week.
And there was a lot of intra-day volatility on Wednesday during the FOMC interest rate announcement, and subsequent interview with Fed Chief Powell.
Trump blasted Powell for “no guts” in not cutting more aggressively. But with an economy with extremely low unemployment, inflation around 2%, and stocks near record highs, is more monetary support really needed?
And there was more political jockeying with the Democratic presidential candidates, with Sen. Warren and Sanders picking up momentum.
Hedge fund manager Leon Cooperman believes if one of them were to win, a bear market would ensue, sending stocks 25% lower.
Why? Because they favor raising taxes, free universal health care, paying off student loans, cracking down on Wall Street and restoring the Glass-Stegal Act, are against free trade, want increased environment protections, etc.
Since 1952, however, no incumbent has lost while unemployment was falling except Gerald Ford. The stock market has much at stake in the outcome.
The strongest markets saw buyers step up on the dip that occurred on Wednesday.
After that, it looked like we were there to see some new all-time highs. The S&P 500 made a peekaboo into that new all-time high area but backed off.
Friday started off with some choppy sideways consolidation, and it seemed like the day was going to be a real “yawner.”
However, when news came out that the Chinese were not going to visit U.S. farmers (more China tariff news), the markets dropped.
Considering the attacks on the Saudi Arabia oil fields, the Fed announcement to cut interest rates by quarter-of-a-point, and China not going to visit U.S. farms, the price action in the broader markets last week was relatively uneventful.
TREND MATRIX PERCENTAGE CHANGES
The chart of interest rates (TBT) made a low two weeks ago and the pullback last week is in the area where buyers should want to purchase again.
The direction of interest rates this week may be a key factor in the direction of the broader markets. So, monitor the ETF symbol TBT to see if it reverses up or continues the decline.
We don’t have any clear patterns across the broader markets, even looking at multiple time frames.
The broader markets' ability to get back up to the top of the range is a positive but so far we do not have any signal that the markets are ready to continue higher.
I pointed out last week that the market internals of sentiment and breadth had moved to marginally bearish levels. Last week’s corrective price action has worked some of that off to neutral.
Next week’s economic news will be the typical reports with the majority of potential movers on Thursday. There are no economic reports coming.
The markets are “on their own” so to speak as to finding a direction or the lack thereof.
The drop that occurred on Friday afternoon that had little to no ability to retrace higher created a bearish candle in most markets and sectors.
While that single candle suggests prices can move lower, the majority of daily trends are consolidating within their up trends at respective resistance areas.
For the moment, it doesn’t support anything more than a neutral bias starting out this week.
VIDEO REVIEW OF INDEX AND SECTOR ETFs
Master Trader Techno-Fundamentals Combined with Investing and Trading ETFs Course HERE
NEW ETF TRADE IDEAS
None at this time; however we are monitoring XLV for a bullish entry:
OPEN AND CLOSED ETF POSITIONS WITH TRADE UPDATES
9/6: HACK – Bought the ETF at $38.90. Stop $37.38.
9/3: ITA – Bought the ETF at $218. Stop: $213.78. 9/21: Move Stop $226.58.
9/9: XLC – Bought the ETF at $50.94. Trail Stopped at $50.60.
9/4: XLP – Bought the ETF at $61.15. Trail Stopped at $60.57.
9/9: XSD – Bought the ETF at $92.41 (5-Min. high). 9/21: Move Stop $91.64.
VIDEO REVIEW OF OPEN AND CLOSED POSITIONS WITH TRADE UPDATES
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