Pessimism: Not in My Backyard!
The big story of the week was seesawing prices and the lack of direction on the large indexes, investors left with no choice but to grapple with Italy’s debt woes and the resurgence of the U.S. trade war. The Dow Jones ended the week off 0.63%, with the surge of almost 1% on the S&P 500 on Friday giving the broad market index gains of 0.29% on the week. The tech-leading NASDAQ ended with nice weekly gains of 1.88%; it’s now closing in on its all-time high from March ’18.
At the same time, if we look a little deeper, there were a lot of positive things to find in last week’s trading. First-off, and perhaps most significant, was the rapidness and ease with which the market shook off Italy’s debt problems, likewise making short shrift of the levies imposed by the U.S. on steel and aluminum imports – all of these stressors appearing and disappearing within one day’s time. Take for example the Exchange Traded Fund (ETF) on the Italian market (EWI), which on Friday recorded its third straight day of gains. The bears may have a strong case why the market still needs to go into tailspin but the bulls are continuing to stick to the strategy which worked time in and time out over the last few years: use any price correction – even the most slight – as a buying opportunity. That’s the tack being followed in our trading course, the best day trading course out there!
The greatest winning argument is that the news over the last week could have easily served as an alibi for an enduring selloff. But that is not what happened! Furthermore, individual stocks performed beautifully, with strong movement – meaning that if you’re traders with your eyes set on trading patterns, last week, a lot of opportunities came your way. And don’t forget the fundamentals in all day trader courses and every day trading academy alike: when opportunity beckons, seize it. Timing is of the essence or simply put, “you snooze, you lose!”
Despite the groundswell of negative news last week, the bright spot came on Friday with the official U.S. governmental report which came out beautifully and exceptionally good! The U.S. economy tacked on 223 thousand jobs in May, far higher than the consensus of 188 thousand. The unemployment rate fall to 3.8% from 3.9%. Stocks on Friday responded to the numbers, as we would have expected with economic figures that came out significantly above expected, one of the day trading basics for beginners.
The bears will point to the fact that the indexes are still trading in a confined range. The S&P 500, for weeks now, has not succeeding in breaking up past the 2,742 point level; it’s also underscored a zig-zap pattern, rising, falling, and then rising and falling again. Buyers have not succeeded in developing the positive momentum the brand of which we saw in January, but have continued to prop up the market, an undercurrent of demand strongly felt.
Trading in individual stocks for the short-term, the latest movement was rather positive. Those investors who are trying to time the market just right are focusing on the face that we’re confined to a trading range, trading filled with a lot of noise but lacking clear direction. At the same time, the conditions are ripe for the trading range to be broken out on the upside rather than the downside, especially seeming that correction buyers have been those who have consistently been rewarded by this market. For that, you don’t need a stock market mentor.
Projections, dooms day prophecies and voices of despair are coming from every direction but price movement refuses to be taken hostage by the pessimism out and about.
This coming week, Wall Street will kick off the June trading month. This will be the first full week of June, bringing with it a number of large events, from tech conferences to mid-term elections on Capitol Hill.
First-off, traders will be awaiting the Worldwide Developers Conference (WWDC) of Apple (AAPL). It is expected to kick off on Monday at 13:00 N.Y. time. It’s not yet clear which new products will be unveiled at the highly-awaited conference.
Like always, be keen to follow our day trading stock picks later in the week.
Have a great trading week!