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Posted 9:30 AM ET - With quadruple witching approaching we knew we were going to have one big trading day this week. Depending on the FOMC today, it could have been yesterday. Stocks shot higher on dovish remarks from the ECB and Trump fueled the move when he said that he was meeting with Xi at the G20 meeting. The S&P 500 is within striking distance of the all-time high and today's FOMC statement will be critical. The ECB will reinstate its bond purchase program. This is the only form of easing they have left and it was not very effective …
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Posted 9:30 AM ET - The market has closed where it opened five of the last six trading days. Trading volume is low and we are trapped in a range. The FOMC statement tomorrow should be a catalyst in one direction or the other. Dovish comments from the ECB are fueling a rally this morning and the S&P 500 is up 18 points before the open. Interest rates in Europe are at 0% and the central bank is out of monetary bullets. Postponing future rate hikes is all they can do. The reaction to the FOMC statement tomorrow will revolve around …
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Posted 9:30 AM ET - Last week I mentioned that the bounce would stall and that the market would fall into a tight trading range. Four out of the last five days have been dojis (opening price equals closing price). The trading volume is light and this pattern will continue. Wednesday the FOMC statement will be released and traders will not place any big bets before that news. The market is pricing in two rate cuts in 2019 and I believe that is overly optimistic. We can expect dovish comments this week, but we won't see a rate cut until September …
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Posted 9:30 AM ET - The market has fallen into a tight trading range this week. A chart of the S&P 500 reveals very small bodies on the daily candles and three of the last four days have finished where they opened. As I mentioned in my comments this week the bounce has run its course and the market will pause before it starts the next leg lower. Broadcom lowered its 2019 revenue forecast by $2 billion (10%) due to the trade war with China and restrictions related to Huawei. We can expect similar from other chip makers. This is the …
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Posted 9:30 PM ET - Yesterday the market traded in a tight range and lackluster trading will continue for another week or two. The news is light and the upward momentum from the bounce has stalled. Trade negotiations with China are strained and I don't believe we will see a deal before the 2020 election. China is preparing fiscal and monetary stimulus to prop up growth. This signals that they are preparing for a prolonged trade war. Trump has threatened to raise tariffs if Xi does not attend the G20 meeting on June 28th. Huawei is still blacklisted and we can …
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Posted 9:30 AM ET - The market hit resistance Monday and the bounce has stalled. Stocks have finished on their low of the day the last two sessions and we are seeing higher opens and lower closes. This is the first sign of strain and the market is likely to trade in a range for the next two weeks. The high of the range has been established and now we will probe for support. Trump said that a trade deal with China might not happen last night. He also said that tariffs would increase if Xi did not attend the G20 …
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Posted 9:30 AM ET - Yesterday the market gapped higher and it tried to advance early in the day. Profit-takers kept a lid on the action and the stocks closed on their low of the day. This left an inverted hammer on the chart and that would be bearish if the market closed lower today. As it stands, stocks are poised to rally this morning. China will issue special purpose bonds and this stimulus has sparked buying this morning. All of the stimulus (fiscal and monetary) during the last year has kept China's growth rate at 6%. I believe they are …
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Posted 9:30 AM ET - The market rebounded more than 150 S&P 500 points in the span of a week. Soft global manufacturing PMI's, declining ISM manufacturing and a light jobs report did not dampen investor spirits. Dovish comments from the Fed sparked buying. The news is light this week and I'm expecting a trading range. Global economic conditions are deteriorating. England posted a .4% decline in GDP. Last week Germany halved its GDP growth forecast for 2019 to .6%. Manufacturing in all of the major European economies is contracting. Japan, Taiwan and South Korea also have declining manufacturing PMI's and …
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Posted 9:30 AM ET - The market continues to bounce off of the lows from Monday. It has cleared the 200-day and 100-day moving averages and the upward momentum is strong. Stocks were deeply oversold and this bounce still has a few more days left in it. Fed officials have been dovish and that has been the primary catalyst for the rally. The market has priced in two rate cuts this year and I believe that is overly optimistic. If global economic conditions continue to slip we might see the first rate cut in September. The economic releases this week have …
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Posted 9:30 AM ET - The market is bouncing from a deeply oversold condition. Dovish Fed remarks sparked buying and this move still has a few days before it exhausts itself. Trade from the long side, but know that this is only a bounce. Trump tweeted that “talks with Mexico are going well, but there is still a lot of work to do”. He wants action, not words. Until border crossings decline he will impose tariffs on Mexico. This is consistent with his election promise that "Mexico will pay for the wall". Rumor has it that Senate Republicans might block the …
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