Commentary: Paul Ebeling on Wall Street

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Growth is the tone“– Paul Ebeling

Last Week’s Action saw a Black Swan

President Trump was infected by the C-19 coronavirus, and hospitalized at Walter Reed, the market sold off over night and recovered by 50% late in the session, and will continue, as the President is expected to be released Monday and be Covid-19 immune.

Thursday, the NAS Comp filled the 8 September gap lower, but the S&P 500 still has room to move.

Technical Analysis:

NASDAQ: The NAS Comp moved over the recovery high and is at the gap point. It is very important that the NAS breaks on through to continue the move back to the all-time high. Tech stocks will be able to do that because they have enough support and good patterns. 

S&P 500: The S&P 500 is not where the NAS Comp is now. It tried to get over the mid-August consolidation for 2 sessions, but it has failed to hold the move. The S&P 500 could very well move to 3,380 and then fade to form a right shoulder, this is reliable Northside patterns in the stock market since the 23 March 2009 low. 

When the S&P 500 gets there, the NAS Comp will have closed the 2nd gap point from the early September selling, building gains in positions held in the QQQ.

What to expect going forward: S&P 500 10% Higher in 1 Yr

My work forecasts that the S&P 500 will rise by 10% time next year.

As a result, industrial and construction material stocks will be among the sectors that will benefit.

That means that the S&P 500 will rise to 3,600 pts by the end of this year and then 3,750 by September 2021, representing a 10% rise from current marks.

I believe that the US markets will make new highs over the next 12 months and that the US corporate earnings picture is Very Strong.

In addition to technology and healthcare, the market rally is expected to broaden to other sectors including the industrial and construction material stocks

The outcome of the upcoming election is not likely to materially drive share prices longer term. This analysis of markets is based on US elections going back to the 1930’s.

The success of The Trump Economy will be the stock market driver.

Pay attention, always take what the market gives.

Have a healthy week, Keep the Faith!

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