“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.

IndexLastDaily change
DJX23,422(0.17%)Down
SPX2,582(0. 09%)Down
Nasdaq6,7510.01%Up

Have a great trading week!

 

Economic Calendar

 

DAYTIME (EST)EventForecastImpact
Tuesday6:00NFIB Small Business Optimism Index105.0Medium
Tuesday8:30PPI0.1 %Medium
Wednesday8:30Consumer Price Index0.1 %Medium
Wednesday8:30Retail Sales0.1 %Medium
Wednesday8:30Empire State Mfg Survey26.0Medium
Wednesday10:00Business Inventories0.1 %Medium
Wednesday10:30Oil InventoriesLow
Thursday8:30Jobless Claims235 KMedium
Thursday8:30Philadelphia Fed Business Outlook Survey25.0Medium
Thursday8:30Import and Export Prices0.4 %Medium
Thursday9:15Industrial Production0.5 %Medium
Thursday10:00Housing Market Index67Medium
Friday8:30Housing Starts1.188 MMedium

 

 

Earning Calendar

 

SymbolCompanyAM/PMDay
WUBA58.com Inc.AMMonday
TSNTyson Foods, Inc.AMMonday
JDJD.com, Inc.AMMonday
AAPAdvance Auto Parts, Inc.AMTuesday
DKSDick’s Sporting Goods, Inc.AMTuesday
LNGCheniere Energy, Inc.AMTuesday
HDThe Home Depot, Inc.AMTuesday
TJXThe TJX Companies, Inc.AMTuesday
YYYY Inc.PMTuesday
ZZillow Group, Inc.PMTuesday
TGTTarget CorporationAMWednesday
NTESNetEase, Inc.PMWednesday
NTAPNetApp, Inc.PMWednesday
LBL Brands, Inc.PMWednesday
CSCOCisco Systems, Inc.PMWednesday
HPHelmerich & Payne, Inc.AMThursday
WMTWal-Mart Stores, Inc.AMThursday
BBYBest Buy Co., Inc.AMThursday
SJMThe J. M. Smucker CompanyAMThursday
VIABViacom, Inc.AMThursday
WSMWilliams-Sonoma, Inc.PMThursday
GPSThe Gap, Inc.PMThursday
SPLKSplunk Inc.PMThursday
ROSTRoss Stores, Inc.PMThursday
AMATApplied Materials, Inc.PMThursday
BRK-BBerkshire Hathaway Inc.AMFriday
FLFoot Locker, Inc.AMFriday

 Today’s Picks – Day Trading!

SymbolBreakoutBreakdownMomentumMomentum
KORS$55.25JUNOXON
FSLR$62.57HABITA
GRUB$63.16MNSTCCL
TSCO$63.50IIVIATI
ROST$66.16XNET 
WUBA$69.80HOG 
VRAY$8.66GIS 
EVH$10.35 
   
   

 New York Strategy Swing

#DateStockLong\

Short

StatuesData CloseProfit\

Loss

11.9.2017VNTVLongClose14.9.2017+1.35%
212.9.2017CPBShortClose15.9.2017-1.10%
318.9.2017INSMLongClose22.9.2017+1.92%
425.9.2017GPSLongClose2.10.2017+1.69%
527.9.2017SQMLongClose29.9.2017+1.69%
62.10.2017ATILongClose6.10.2017+3.12%
72.10.2017TROXLongClose18.10.2017+13.93%
83.10.2017ABTLongClose11.10.2017+1.60%
99.10.2017ZGNXLongClose12.10.2017+3.26%
1016.10.2017INSMLongClose19.10.2017-2.82%
1124.10.2017CVSShortClose1.11.2017+4.77 %
1230.10.2017SKXLongClose31.10.2017-1.42%
1331.10.2017STXLongClose2.11.2017-0.15%
143.11.2017AKAMLongClose8.11.2017+1.37%
1510.11.2017JUNOLong  +3.13%
16 
17
18      

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

No.1 –    MTCH

Company NameMatch Group, Inc.
Entry Point29
Stop Area27.95
1st Target29.60
Swing Target32.87
Avg. Volume1.82M
SectorTechnology | Internet Information Providers
Earning Date
Risk RateNormal
Risk\Reward Ratio3.69:1