Market Commentary: S&P 500, Dow, Nasdaq Surge To New All-Time Highs – Jerry Robinson (7/14/19)
Trend for Position Traders
7/12/19… The S&P 500 index remains in a strong Position uptrend and continues to be supported by a Long-Term uptrend.
The S&P 500 smashed above 3000 to close at a new all-time record high on Friday. Despite a complex backdrop of economic warfare and geopolitical intrigue, the market is continuing its ascent. The 3000 level, of course, is a key psychological area that will long serve as an important area for support and resistance.
The index closed at $3013 on Friday, a new record high. Year-to-date, the index has risen more than 20%.
The S&P 500 index continues its ascent as market participants broadly anticipate that the Federal Reserve will cut interest rates this month for the first time in a decade. Any failure on the part of the Fed to live up to this expectation at its July 30-31 policy meeting would certainly tank the markets. However, that appears unlikely as the Fed has strongly hinted that lower interest rates are coming soon. So what’s the reason for cutting interest rates in the middle of a bull market? According to Fed Chair Jerome Powell: “The bottom line is, the economy is in a very good place, and we want to use our tools to keep it there,” adding, “It’s very important this expansion continue as long as possible.” So consider the Fed’s new dovish stance as a pre-emptive strike against the next economic downturn. With record debts and deficits, Washington is leveraged to the hilt as yet another debt ceiling debate looms on the horizon. Sooner rather than later, we expect that the Fed will join the growing number of central banks around the world that are now charging negative interest rates.
Energy (XLE) and Consumer Discretionary (XLY) led the market higher on the week. Energy prices are rising higher in July amid improving fundamentals. The U.S. Crude Oil ETF (USO) rose nearly 5% last week and is now attempting a new 200 DMA breakout. Meanwhile, consumer, communications, and technology stocks all moved higher last week.
Last week’s losers included the Healthcare (XLV) and Basic Materials (XLB) sectors. The political and economic uncertainties swirling around the healthcare sector, especially as it relates to how Washington reacts to America’s healthcare crisis, are immense and could continue to put pressure on the sector as a whole. However, there are several industries within the healthcare sector, like genomics, that we like right now.
There is very little (if any) overhead resistance for the S&P 500 index as we head into next week.
Our Market Trakker alert system will keep you advised of the current broad U.S. stock market trend. Smart traders may take the opportunity now to research their favorite stocks and ETFs so that they can take advantage of the inevitable price moves!
When we detect a change in the major Long-Term trend, you will be notified again by email along with details on how we are responding to the selloff.
Long-Term Trend for Long-Term Investors
7/12/19… The S&P 500 Long-Term trend is in a confirmed uptrend. When our Market Trakker system detects a change in the underlying Long-Term Trend in the S&P 500, this page will be updated and all current members will receive an alert by email.
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