“The Market’s Gotta Drop” is Not a Trading Strategy!

If the “market’s gotta drop” was a valid trading strategy, it would seem that one should have gone short on the market a long time ago. The S&P 500 and the Dow Jones have thwarted any thinking that that strategy might be a good one, setting new historic highs now for longer than any investor could have thought logical or reasonable. And that’s without a single price correction to boot! This rally has been stable and amazing and it’s hard not to wonder how much farther the market can still climb.

Eight straight trading weeks – the longest winning streak since 2013 – came to a close this past week, the Dow Jones and the S&P 500 recording light gains in summary for the week on Wall Street. The S&P 500 recorded negligible losses of 0.14%, the Dow ending marginally off by 0.32%.

A short-term technical state of oversold levels is already in place and so a price correction could lay down roots aver the coming weeks. As things have it, the loss of momentum would be expected to cloud over stocks that had extended their uptrend over the last few weeks.

Some tech stocks ended down last week, including Facebook (FB), Netflix (NFLX), and Google (GOOGL). The tech sector has seen the best gains year-to-date, the selling pressure over the last few week accentuating investors’ concerns about a postponement in the Trump’s big tax reform plan. On Thursday, stocks fell over 1%, before succeeding in capping off trading far from the bottom after news spread of the Senate’s tax initiative. The Senate proposal would be likely to push back the tax plan for another year, until 2019.

The bears are focusing on tax reform as a possible catalyst for selling pressure, but nothing in that regard has materialized. Conversation at the water coolers on Wall Street have abounded about the sharp decline on junk bold yields (JNK). The pessimistic camp is contending that the disparity between U.S. T-bonds and the yields on junk is so small that it could lead to significant problems.

Maybe… but the biggest problem now for the bears has been and still is timing. The uptrend, in the meantime, has plowed onwards through thick and thin to an extent not thought possible. The thinking, “the market’s gotta fall,” simply isn’t working. Last week we saw a small change in index movement, as the FAANG stocks slowed their advance, but there’s still no solid proof pointing to a significant downtrend unfolding.

Index Last Daily change
DJX 23,422 (0.17%) Down
SPX 2,582 (0. 09%) Down
Nasdaq 6,751 0.01% Up

Have a great trading week!

 

Economic Calendar

 

DAY TIME (EST) Event Forecast Impact
Tuesday 6:00 NFIB Small Business Optimism Index 105.0 Medium
Tuesday 8:30 PPI 0.1 % Medium
Wednesday 8:30 Consumer Price Index 0.1 % Medium
Wednesday 8:30 Retail Sales 0.1 % Medium
Wednesday 8:30 Empire State Mfg Survey 26.0 Medium
Wednesday 10:00 Business Inventories 0.1 % Medium
Wednesday 10:30 Oil Inventories Low
Thursday 8:30 Jobless Claims 235 K Medium
Thursday 8:30 Philadelphia Fed Business Outlook Survey 25.0 Medium
Thursday 8:30 Import and Export Prices 0.4 % Medium
Thursday 9:15 Industrial Production 0.5 % Medium
Thursday 10:00 Housing Market Index 67 Medium
Friday 8:30 Housing Starts 1.188 M Medium

 

 

Earning Calendar

 

Symbol Company AM/PM Day
WUBA 58.com Inc. AM Monday
TSN Tyson Foods, Inc. AM Monday
JD JD.com, Inc. AM Monday
AAP Advance Auto Parts, Inc. AM Tuesday
DKS Dick’s Sporting Goods, Inc. AM Tuesday
LNG Cheniere Energy, Inc. AM Tuesday
HD The Home Depot, Inc. AM Tuesday
TJX The TJX Companies, Inc. AM Tuesday
YY YY Inc. PM Tuesday
Z Zillow Group, Inc. PM Tuesday
TGT Target Corporation AM Wednesday
NTES NetEase, Inc. PM Wednesday
NTAP NetApp, Inc. PM Wednesday
LB L Brands, Inc. PM Wednesday
CSCO Cisco Systems, Inc. PM Wednesday
HP Helmerich & Payne, Inc. AM Thursday
WMT Wal-Mart Stores, Inc. AM Thursday
BBY Best Buy Co., Inc. AM Thursday
SJM The J. M. Smucker Company AM Thursday
VIAB Viacom, Inc. AM Thursday
WSM Williams-Sonoma, Inc. PM Thursday
GPS The Gap, Inc. PM Thursday
SPLK Splunk Inc. PM Thursday
ROST Ross Stores, Inc. PM Thursday
AMAT Applied Materials, Inc. PM Thursday
BRK-B Berkshire Hathaway Inc. AM Friday
FL Foot Locker, Inc. AM Friday

 Today’s Picks – Day Trading!

Symbol Breakout Breakdown Momentum Momentum
KORS $55.25 JUNO XON
FSLR $62.57 HA BITA
GRUB $63.16 MNST CCL
TSCO $63.50 IIVI ATI
ROST $66.16 XNET  
WUBA $69.80 HOG  
VRAY $8.66 GIS  
EVH $10.35  
     
     

 New York Strategy Swing

# Date Stock Long\

Short

Statues Data Close Profit\

Loss

1 1.9.2017 VNTV Long Close 14.9.2017 +1.35%
2 12.9.2017 CPB Short Close 15.9.2017 -1.10%
3 18.9.2017 INSM Long Close 22.9.2017 +1.92%
4 25.9.2017 GPS Long Close 2.10.2017 +1.69%
5 27.9.2017 SQM Long Close 29.9.2017 +1.69%
6 2.10.2017 ATI Long Close 6.10.2017 +3.12%
7 2.10.2017 TROX Long Close 18.10.2017 +13.93%
8 3.10.2017 ABT Long Close 11.10.2017 +1.60%
9 9.10.2017 ZGNX Long Close 12.10.2017 +3.26%
10 16.10.2017 INSM Long Close 19.10.2017 -2.82%
11 24.10.2017 CVS Short Close 1.11.2017 +4.77 %
12 30.10.2017 SKX Long Close 31.10.2017 -1.42%
13 31.10.2017 STX Long Close 2.11.2017 -0.15%
14 3.11.2017 AKAM Long Close 8.11.2017 +1.37%
15 10.11.2017 JUNO Long     +3.13%
16  
17
18            

 Today’s Picks – Swing “New-York Strategy”

No.1 –    MTCH

Company Name Match Group, Inc.
Entry Point 29
Stop Area 27.95
1st Target 29.60
Swing Target 32.87
Avg. Volume 1.82M
Sector Technology | Internet Information Providers
Earning Date
Risk Rate Normal
Risk\Reward Ratio 3.69:1