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Commentary: Paul Ebeling on Wall Street




“The sentiment still says, there is no Bubble in this market”— Paul Ebeling

Last Week

Fed Chairman Powell said Friday that the US economic recovery appears to be making progress, but warned that the FOMC needs to be careful not to tighten its policy before enough Americans can return to work, Dovish and Very Bullish.

The Technicals

The Russell 2000 and the S&P 400 led higher last wk with strong percentage moves.

The small-cap and mid-cap stocks demonstrated good patterns. They were just testing after 4 sessions of Northside action. Then factor in the same for the large-cap indices, since they sold at a fairly even pace in terms of percentages, we see that the PHLX Semiconductor Sector (SOX) performed the best. It closed flat with a 2nd Doji and held the gainer off of the lows.

What to expect this week

Market watchers have heard the warnings over and over. Stocks are expensive. Growth is set to slow. Higher taxes and hawkish monetary policy are threats.

Yet there’s a mighty force pushing back against all the bearish voices: buyers who keep on buying.

Trillions are buying letting the S&P 500 brush off those Bear warnings

Demand is up across the board, from die-hard day traders piling into meme stocks, to ETFs and once-cautious hedge funds now raising leverage to boost exposure.

With dip buyers ready to jump in at every pullback, the S&P 500 Index has gone 7 months without a 5% drawdown, the longest stretch since February 2018.

Investors are set to receive more data on the strength of the labor market recovery this week, with the Labor Department’s August jobs report due out on Friday. Consensus economists are looking to see that 750,000 payrolls came back during the month, representing an 8th month running of gainers.

The report will be another important data point in informing the Fed’s monetary policy plans going forward. Federal Reserve Governor Christopher Waller said Friday that he would support beginning the Fed’s asset-purchase tapering process as soon as this fall if the August jobs report shows another strong payroll gain. The Fed next convenes for a policy-setting FOMC meeting on 21-22 September. 

Have a prosperous week, Keep the Faith!

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Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he is the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.