Commentary: Paul Ebeling on Wall Street

Commentary: Paul Ebeling on Wall Street

#PaulEbeling #WallStreet

$DIA $SPY $QQQ $RUTX $VXX

The cynics obsess over negatives, as the market is focused on positives and the S&P 500 is closing in on a record high.

Last week’s action

The Market Needs a Stimulus Agreement and Will Get It

President Trump’s Treasury Secretary Mnuchin announced a coming aid/relief/stimulus agreement. Expecting more from the Fed too. We should have it this week.

Thursday, Treasury Secretary Mnuchin appeared on TV and announced that the White House and Republican members of Congress had reached a stimulus deal that did not include eliminating the payroll tax on this round. 

Some of America’s major companies: Amazon, Walmart, Home Depot, Target, Tractor Supply Company and others were given a pass during the lockdown because they are considered essential businesses.

These companies used the opportunity to improve and streamline their systems. They also put space between themselves and the companies that were forced into lockdown.

Technical Analysis

The NAS Comp may be extended at this point. Thursday, the NAS put in a higher high and faded, looking for a test of its support now.

The S&P 500 faded to the 10-Day EMA on light, not dumping. The index has a good pattern, but is continuing to struggle between range 3,200 and 3,300. Watching closely to see what happens. It must close solidly above 3226.5 to breakout of the range.

What to expect: If there was going to be a major sell-off it would have already occured.

The cynics obsess over negatives, the market is focusing on positives and the S&P 500 is closing in on a record high.

Despite lots of reasons for a selloff, the market is not breaking down. As you can see from the chart above, the S&P 500 (NYSEArca:SPY) is closing in on a record high, with strong support.

For each negative piece of market news there is a positive counterargument to be made.

Virus infection rates are high, but progress is being made on a vaccine. Unemployment is off the charts, but the government’s handing out free money. See what I mean?

Stocks are not racing higher like they were in March, April, and May, but they are amazingly resilient, and we are in the Dog Days of Summer.

S&P 500 3000 support was rock solid in June and we keep bouncing back to the rebound highs.

Ok, there are Red flags: hefty valuations, geopolitical tensions, rising coronavirus cases to suggest that stocks should be going down. Sure, but should is not is in this Bull market. We always take that the market gives. Anyone trading should is losing money now and we will not join them.

If you are a trader keep moving sell stops up to protect against a downturn and ride the wave North as the market looks committed to giving.

The major US stock market indexes is on pace to challenge all-time highs over the next few wks.

If this market was going to breakdown, it would have happened by now as it is marking more ups than downs, everything is on track.

Pay attention, it is your money, so your responsibility, and again, always take what the market gives.

Have a healthy week, Keep the Faith!

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Paul Ebeling

Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he it 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.