Sunday, August 11, 2019

Market Analysis/Swing Watchlist Session 8/11/2019

The U.S. stocks finished the week a tick lower, with the S&P finishing .05% lower putting it now up 16.4% on the year.  We continue to see volatility in the market due to the ongoing trade tensions between the U.S. and China. Global markets reacted to an unexpected drop in the value of China's currency, which was originally viewed as a retaliation to the recently announced tariffs on Chinese goods scheduled to take effect in September. Chinese officials have come out to reassure markets that they don't plan to embark in a currency devaluation campaign which seems to have satisfied those fears.  I still believe that there will be a compromise in this trade war but as I have been saying for the last six months, I do not believe it will be an easy fix and it won’t happen anytime soon.  The general consensus is that the outlook is still positive based on resilient economic expansion, modestly rising corporate profits, and still-low interest rates. This will continue to create volatility in the market, but I believe it can position itself in a range for quite a while. 

The S&P 500 was at an all-time high just two weeks ago, but as we stated earlier this latest escalation in the US-China Trade war and the Fed dropping the interest rates led to the market experiencing its worst day of the year on last Monday.  However, it is seeming to hold on this ascending support.  I believe that range between the ascending support level (blue line) and the descending resistance level (purple line) will continue to close up and hold the price action in that range channel.

SPY SPDR S&P 500 ETF daily Stock Chart

The Basic Material sector continues to anchor the other sectors I believe due to the trade tensions, which can make this snap back on any positive news related to trade or crude oil.

You can get a better look at it on this chart.  I use the 50sma as my guide so a big parabolic move away from the 50 will trigger some type of snap back to it.

Coming Up This Week

This second-quarter earnings season will continue to slow down with less than 3% of companies in the S&P 500 reporting results this week. Economic data being released in the U.S. include inflation on Tuesday, retail sales on Thursday, and consumer sentiment on Friday.

Oversold Watch

DLTR Dollar Tree, Inc. daily Stock Chart

DXC DXC Technology Company daily Stock Chart

20EMA Crossover Watch

TER Teradyne, Inc. daily Stock Chart

52 Week High Watch

EIX Edison International daily Stock Chart

HSY The Hershey Company daily Stock Chart

ROKU Roku, Inc. daily Stock Chart