Commentary, Paul Ebeling on Wall Street

#PaulEbeling #WallStreet #SP500 #Bulls #bears #cryptocurrencies #MCAD


“US stock benchmark indexes reversed Friday and continued through Monday as bears turned into Bulls“– Paul Ebeling

DJIA +406.39 at 35131.86, NAS Comp +469.31 at 14239.88, S&P 500 +83.70 at 4515.55

Monday, on no specific catalysts the S&P 500 rose 1.9% led by the growth stocks. The NAS Comp (+3.4%) and Russell 2000 (+3.1%) outperformed with gains over 3.0%, while the DJIA underperformed with a 1.2% gainer. 

  • DJIA -3.3% YTD
  • S&P 500 -5.3% YTD
  • NAS Comp -9.0% YTD
  • Russell 2000 -9.7% YTD

Traders looked ahead to another full wk of corporate earnings results and economic data that may alter the Fed’s latest monetary policy pivot. 

Whether the Fed is able to raise interest rates and/or adjust its policies to bring down inflation without negatively impacting economic growth and corporate profits is a Key question, it will not move to negativatly affect US economic growth.

As of Friday, the expected earnings growth rate for the S&P 500 was at 24.3%, based on actual results from companies that had reported so far and projected results for those reporting later. If this rate comes in as expected, it would mark the 4th Quarter running that S&P 500 earnings growth topped 20%.

On the Crypto front

Bitcoin’s long-term Bullish monthly MACD (moving average convergence divergence) histogram has crossed below zero, a so-called sell signal, indicating a bullish-to-bearish trend change on the longer duration price chart.

There is an unconfirmed monthly MACD ‘sell’ signal that would support a long-term bearish bias if confirmed alongside a breakdown of support at $37,400

Bitcoin traded at $38,515 at press time. The MACD needed to stay negative through Monday’s UTC (23:59) close to confirm the sell signal, it did not.

Technical studies like MACD, which are based on backward-looking moving averages, are less reliable than fundamental or macro factors. As of now, macro appears to have aligned in favor of the Bulls

Bitcoin will start a 3rd straight month of losses due to fear of global monetary policy tightening.

Have a prosperous week, Keep the Faith!