How to Rack in Cash in this Market!
By: Shlomo Cooper, Senior Analyst at Tradenet
This past week, stocks rallied quickly at the beginning of the week, the gains ultimately recorded come week’s end on the S&P 500 and the Dow being the best of the year. Fed Chairwoman, Janet Yellen, made it clear in her congressional testimony last week that another rate hike is impending and that strong consumer figures and that increasingly strong inflation figures, support a rate hike. This Wednesday, the release of the Fed minutes from its latest meeting, will therefore be critical in terms of its ability to signal to the market whether already in March we’re going to get our first rate hike of the year.
In summary, on the week, the S&P 500 soared 1.5%, the Dow rallying 1.7%, the NASDAQ closing sharply up by 1.8%.
The indexes didn’t succeed in making significant progress on Friday, but the intraday pattern was a remake of what we had seen all week long. Stocks kicked off the day slowly, but buyers appeared – already in the first trading hour – with the weakness falling by the wayside and the market charging higher until the finish line. The S&P 500 has closed near its all-time high on each of the last 8 trading days.
There’s no shortage of statistical data to hone in the fact that Wall Street movement has been one-sided of late, though it’s important to say it like it is, i.e. momentum tends to last longer than investors believe to be logical or reasonable. On an emotional front, most traders and investors feel that the market has rallied too much and too quickly – and they are therefore ready for a correction movement. The rational approach is that a strong market like ours is not going to lose ground easily seeing that there are so many investors who are trying to play catch up and who will look to make up lost ground with every light decline.
The big challenge in a market like our own is that stocks are becoming more and more stretched, with entry points requiring investors to accept higher risk thresholds. In contrast to the commonly accepted approach, a stretched market usually tends to become more stretched and therefore, players need to have a higher level of confidence in market momentum to continue putting their money to work.
The bears are still mulling over what the next market reversal catalyst will be. Most of the pessimism centers on chances that Trump’s fiscal policy won’t go through Congress easily or smoothly. The bears are still convinced that disaster lurks around the corner, but it’s worth noting that they couldn’t have been more wrong about the market’s timing until now.
It may perhaps sound too simplistic to be truly effective, but the key to the most recent success was to stick to the trend and to not try to anticipate the reversal. That’s the way to make money in a market like this!
This coming week, investors will be on the hunt for more good news about the economy and signs from the economy that the wheels are churning to advance tax reform. The earnings reports of large retail chains and the minutes from the latest Fed meeting will be on center-stage. The Q4 earnings season is nearing its end and this week, traders will be following HD, WMT, and KSS, which will be among the large reporting companies.
Have a great trading week!
|Wednesday||10:00||Existing Home Sales||5.57M||Medium|
|Thursday||9:00||FHFA Housing Price Index||0.4%||Medium|
|Friday||10:00||Michigan Sentiment – Final||95.8||High|
|Friday||10:00||New Home Sales||566K||Medium|
|VIPS||Vipshop Holdings Limited||PM||Monday|
|WAB||Westinghouse Air Brake Technologies Corporation||AM||Tuesday|
|EXPD||Expeditors International of Washington, Inc.||AM||Tuesday|
|AAP||Advance Auto Parts, Inc.||AM||Tuesday|
|GPC||Genuine Parts Company||AM||Tuesday|
|HD||The Home Depot, Inc.||AM||Tuesday|
|WMT||Wal-Mart Stores, Inc.||AM||Tuesday|
|EXAS||Exact Sciences Corporation||AM||Tuesday|
|ARIA||ARIAD Pharmaceuticals, Inc.||AM||Tuesday|
|PWR||Quanta Services, Inc.||AM||Tuesday|
|XPO||XPO Logistics, Inc.||PM||Tuesday|
|FSLR||First Solar, Inc.||PM||Tuesday|
|WLL||Whiting Petroleum Corporation||PM||Tuesday|
|NEM||Newmont Mining Corporation||PM||Tuesday|
|WCN||Waste Connections, Inc.||PM||Tuesday|
|NFX||Newfield Exploration Company||PM||Tuesday|
|SIX||Six Flags Entertainment Corporation||AM||Wednesday|
|LAMR||Lamar Advertising Company||AM||Wednesday|
|NCLH||Norwegian Cruise Line Holdings Ltd.||AM||Wednesday|
|DISH||DISH Network Corporation||AM||Wednesday|
|SO||The Southern Company||AM||Wednesday|
|TJX||The TJX Companies, Inc.||AM||Wednesday|
|EV||Eaton Vance Corp.||AM||Wednesday|
|TOL||Toll Brothers, Inc.||AM||Wednesday|
|WPX||WPX Energy, Inc.||PM||Wednesday|
|NBR||Nabors Industries Ltd.||PM||Wednesday|
|SLCA||U.S. Silica Holdings, Inc.||PM||Wednesday|
|OAS||Oasis Petroleum Inc.||PM||Wednesday|
|CLVS||Clovis Oncology, Inc.||PM||Wednesday|
|CAKE||The Cheesecake Factory Incorporated||PM||Wednesday|
|TSRA||Tessera Holding Corporation||PM||Wednesday|
|SM||SM Energy Company||PM||Wednesday|
|CTRP||Ctrip.com International, Ltd.||PM||Wednesday|
|LB||L Brands, Inc.||PM||Wednesday|
|CLR||Continental Resources, Inc.||PM||Wednesday|
|RRC||Range Resources Corporation||PM||Wednesday|
|ZBRA||Zebra Technologies Corporation||AM||Thursday|
|ACIA||Acacia Communications, Inc.||PM||Thursday|
|HPE||Hewlett Packard Enterprise Company||PM||Thursday|
|BMRN||BioMarin Pharmaceutical Inc.||PM||Thursday|
|GPS||The Gap, Inc.||PM||Thursday|
|FL||Foot Locker, Inc.||AM||Friday|
|COG||Cabot Oil & Gas Corporation||AM||Friday|
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