The news continues to jostle the market as traders can’t help but pay attention.
Here’s today’s levels to watch:
S&P 500 (SPY) Ultimately, it will come down to whether this closes the week under 271.35 or over 278.
Russell 2000 (IWM) A small runaway gap if confirms by not filling the gap to 168.77. Calling 167.70 pivotal
Dow (DIA) This could close the week out under the exponential MA (246.80). But if it holds, that would give the bulls more hope
Nasdaq (QQQ) Made a new all-time high to 177.98. 176 now the pivotal support
Daily Market Commentary
With an acute sense of smell, our pup, in an almost Spiderman type move, climbed the diamond plastered wall to get a better sniff.
The older dog, much more skeptical yet clearly intrigued, stood by.
What the pup might have sensed, is that regardless of what the news throws at the market, it’s flavorful aroma cannot be denied.
Tariffs?
At this point more talk than action.
Budget cuts?
Rejected by the Senate.
North Korea?
Who knows. Currently overshadowed with the U.S Immigration policies.
Tax cuts?
No secret that corporations are still buying back their own stocks.
One should keep an eye on a story that came out today that signaled a decline in confidence among companies and ““For the first time, we’re hearing about decisions to postpone investment, postpone hiring.” Powell.
Interest Rate Raises?
Should a trade war occur, it “would be a headache for central banks given it would likely deal stagflationary blows to their economies by forcing consumer prices up and demand down.” Bloomberg.
Having owned dogs for all my life, I can attest that they are equally attracted to the smell of food as they are to the smell of excrement.
Hence we ask, what exactly is that flavorful aroma our pup so intently smells?
Mr. Russell 2000 deserves the credit for throwing treats at the bulls.
Granny Retail (XRT) is keeping the bulls happy by buying them lots of toys to play with.
Biotechnology has helped too.
Speculators have come piling in, leading IBB to its highest levels since March.
On the flip side, Transportation relatively underperformed.
IYT traded within Tuesday’s trading range, or put in an inside day.
I find this curious as IWM and XRT’s strength should have motivated this sector to do better.
If there is anywhere to focus on to see if company’s declining confidence and Powell’s hawkish talk of more rate rises have a longer lasting impact, it’s here on IYT.
From a technical standpoint, IYT can easily fall to test 180-190 or a 5-10% move lower from the high of 201 made last month.
What would negate that is first, a return over 198, and more importantly, a move over 201.
Another late breaking story today is from FedEx (FDX).
They forecast GDP growth at 2.9% this year and 2.7% next year. Globally, they predict 3.2% this year and 3.1% next year.
That not only implies a slowdown, but it also comes from the number 1 holding in the IYT ETF basket.
Lucky are the bulls who have been loved by the dog.
Nevertheless, the brown earth dog is intuitive and can see (or smell) dangers where there aren’t any.
Note that you can get daily trading ideas and market insights over on Market Gauge. Thanks for reading.
Twitter: @marketminute
The authors may have a position in the mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
