Traders are grappling with price movement that’s been confined to a set trading range. The indexes over the last week treaded in place and stabilized, the market failing to create momentum in either direction. There’s been no shortage of news, though! There are plenty of opportunities to react to the news, but nothing’s created true emotions in this market. In live trading you always have to be on your toes, but when it comes to Trump, you have to be more ready than ever!
In summary for the week, the indexes indeed ended lightly up. We saw zigzag movement, the real drama over the course of the week being the cancellation of the North Korea-U.S. summit. Over the weekend, Trump retracted the cancellation of the meeting, announcing that the summit would presumably take place at some point in time. In summary for the week, the S&P 500 recorded light gains of 0.3%, the Dow advancing 0.15%. The NASDAQ was the strongest index on the week with weekly gains of 1.35%.
The market shrugged off the drama revolving the North Korean summit, redirecting its attention to Friday’s sharp drop in the price of crude. The “black gold” fell almost 4.5% after reports came out that Saudi Arabia and Russia were planning to heighten production at current price levels.
The crude rally that began in June ’17 had been a source of support for the stock market. A change in the dynamics in price movement is likely to affect the overall market. A lot of times we hear the contention that cheap crude prices are good for consumers and businesses, but it’s important to remember that energy companies constitute a significant component of the market and their performance is likely to offset the effect of the higher gas prices paid by consumers and businesses alike.
The decline in crude on Friday offset some of the positive movement created in response to North Korea’s reaction to Trump’s annulment of the summit. It’s perfectly clear that North Korea is interested in the summit taking place; the diplomatic jostling, though, will continue for the time being. Day trading live necessitates keeping your finger on the pulse of the market – and the news – through thick and thin. Keep your eyes tuned to the media!
Many in the business media continue to hope that the decision set Trump now faces, and the indecisiveness he has shown from trade with China to meeting with North Korea’s premier will ultimately kill the bull rally. Stocks, though, have refused to fall for a continued amount of time.
Some will claim that there’s a tendency on the part of the media that leads to negative spins constantly being followed up by stock market rallies. At the same time, traders have already learned that the smartest tack is to buy any price correction resulting from fear that Trump is going to sow economic damage, or any like claim. The most proven methodology since the elections has been to buy in every time headlines parade that Trump will cause a market downtick. If you’re following our online trading course, that’s what we do: says it like it is, no holds barred. Trump rattles the market, traders pounce and come out the richer! A winning formula to say the least.
The bulls will claim that the latest movement is no more than a healthy price consolidation, creating the needed foundation for the next burst of upward momentum.
The bears will claim that the fact that buyers are dragging their feet and remain unconvinced reflects signs that indexes are expected to encounter problems shortly. The bears want to believe that President Trump will strike a lethal blow against the market with a trade war and other political mayhem. But it simply hasn’t been happening. Maybe in the future these cold drafts will find expression in the market price – but all in all, the above approach has been a losing argument from the day Trump was elected president – and it continues to be a losing argument! And yet, for the most devout bears, it’s been a trading challenge if there ever was one.
Short-term traders – day traders and swing traders – will point to the fact that we’ve seen beautiful movement in individual stocks, and that’s despite the fact that indexes have only given us flat movement. That could change this coming week after the long weekend. That’s something you might not hear in your run-of-the-mill stock market day trading courses.
When Traders return to their desks on Tuesday after the long weekend and kick off the long, hot summer days, this is what they should set their sights on: the Economic Calendar. First-off, Tuesday brings with it the Consumer Confidence Index and the ADP survey on the number of private sector positions available. Also on Tuesday, be primed and ready for GDP figures, which are expected to showcase an economy growing in Q1 at an annualized clip of 2.3%. Thursday, then, will bring with it private spending and income figures. And then comes Friday, June 1st. It will be the most important day of the week on the Economic Calendar, with the official U.S. government employment release. Economists’ projection is that 190 thousand new jobs were created in May, a rise from the previous month’s figure of just 164 thousand new hires. The unemployment rate is expected to remain at 3.9%, hourly wages expected to grow by 0.3%.
Have a great trading week!
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