Trend for Position Traders
8/16/19… The S&P 500 index remains in a Position uptrend, despite the recent selloff, and continues to be supported by a Long-Term uptrend.
It was another wild week on Wall Street with four days out of five closing up or down more than 1%. The recent market gyrations arrived in the wake of collapsing U.S. bond yields and intensifying U.S.-China trade (and currency) tensions. The recent selling pressure has kept the index from recovering its key psychological support area of $3000, despite an increasingly accommodative Federal Reserve, which recently delivered its first interest cut rate in a decade..
The index closed at $2888 on Friday. Year-to-date, the index has risen 15.2%.
The S&P 500 experienced more volatility last week as more investors piled into safe-haven assets like physical gold, bonds, and some defensive stocks. With a growing chorus of economists warning of slowing economic growth, demands for long-term U.S. bonds drove yields to historic lows last week as the 30-year Treasury yield dipped below 2% for the first time ever. So too, the 10-year Treasury yield briefly slipped below the 2-year yield last week, which is an event known as an inverted yield curve. We have been warning our members since March about the threat of a yield curve inversion as it often precedes the emergence of a recession by 6-18 months.
Traders (and investors) should know that current volatility levels are indicative of a potential change in the market’s uptrend. After all, changes in the major market trend are typically accompanied by a period of extreme volatility indicating the end of an uptrend and the beginning of a new downtrend. At present, it is too early to know if U.S. stocks are heading for a new long-term downtrend in the near-term. However, we will continue to monitor the markets and keep our members alerted when the trend has clearly shifted within our system.
Of course, the “X-factor” is a sudden announcement of further monetary (more likely than fiscal) stimulus to head off a potential recession. That could serve as a near-term bullish jolt to the market and allow the S&P 500 to breakout and resume its uptrend after retaking the key $3000 level. However, with interest rates still at historically low levels, it is difficult to imagine that the Fed has much firepower left to sustain the current “expansion” through mere rate cuts alone.
For now, watch key support at the S&P 500’s 200 DMA, currently around $2800. A break below that level will find new support at $2720.
Earnings season continues on next week with several companies set to report, including Baidu (BIDU), Baozun (BZUN), Lowe’s (LOW), Alibaba (BABA), and Target (TGT), just to name a few.
Defensive stocks provided the only gains last week led by Consumer Staples (XLP +1.5%), Utilities (XLU +0.8%), and the Real Estate (XLRE +0.5%) sectors. Meanwhile, the Energy (XLE -3.5%) led the laggards last 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
8/16/19… 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.
Market Trakker Charts – Updated Every Weekend
S&P 500 Index – Daily Chart
S&P 500 Index – Long-Term Trend Chart
(Last Long-Term Uptrend Alert on 4/5/19)
S&P 500 Index ETF (SPY) – 2 Year Weekly Chart
S&P 500 Futures Chart
Updates upon refresh during market hours
Percent of S&P 500 Stocks Above 200 DMA
(Measures market participation)
U.S. New Highs-New Lows
(Gauges internal trend momentum)
S&P 500 Index – P/E Ratio
(Current P/E valuation of S&P 500)
Min: 5.31 (Dec 1917)
Max: 123.73 (May 2009)
Market Trakker Resources
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