Commentary: Paul Ebeling on Wall Street

Commentary: Paul Ebeling on Wall Street

$DIA, $SPY, $QQQ, $RUTX

Columbus Day in the USA, Banks are Closed, Market is Open

The market’s focus this week: Earnings

Yes, it is earnings reporting season again, this frame always commands a great deal of attention because earnings drive stock prices over the long term.  To that end, the S&P 500 has been on cruise control for a while now, underpinned by impressive earnings growth.

The Q-3 reporting period, which begins in earnest this Friday with reports from JPMorgan Chase (JPM), Citigroup (C), and Wells Fargo (WFC), should be no different.

The earnings growth should be impressive.

The Big Q: Will the guidance be impressive too?

There are some concerns that it may not be, which is why the Q-3 reporting frame, and the market’s reaction to it  must be watched closely.

According to FactSet, the estimated Q-3 earnings growth rate for the S&P 500 is 19.0%, which means S&P 500 companies are on track to print the 3rd best Quarter of earnings growth since Q-1 of Y 2011.

That is why it can be said Q-3 is likely to produce another Quarter of impressive growth.

Expectations have been tempered a bit then since Q-3 began, but they are on the high side, stay tuned more to come.

And always remember, do your own work, tune out the noise and take what the market gives.

THIS WEEK’S MAJOR US ECONOMIC REPORTS
TIME (EDT) REPORT PERIOD ACTUAL FORECAST PREVIOUS
MONDAY, 8 October
None scheduled
Columbus Day
TUESDAY, 9 October
6 am NFIB small-business index Sept. 108.8
WEDNESDAY, 10 October
8:30 am Producer price index Sept. 0.2% -0.1%
10 am Wholesale inventories Aug. 0.6%
THURSDAY, 11 October
8:30 am Weekly jobless claims 10/6 206,000 207,000
8:30 am Consumer price index Sept. 0.2% 0.2%
8:30 am Core CPI Sept. 0.2% 0.1%
2 p m Federal budget Sept. $8 bln
FRIDAY, 12 October
8:30 am Import price index Sept. -0.6%
10 am Consumer sentiment index Oct. 100.6 100.1

Last week we saw a test of the DJIA 50-Day MA and a bounce, while pundits called for a market melt down, the indexes found support, and individual stocks did too, and held.

The Bulls Vs The Bears

DJIA at the 20-Day MA, S&P 500 at the 50-Day MA, S&P 400, RUTX at the 200-Day MA, tapping it at the low, and bouncing.

HeffX-LTN Analysis for VXX: Overall Short Intermediate Long
Neutral (-0.09) Neutral (-0.07) Neutral (0.12) Bearish (-0.33)

 

Support and Resistance

HeffX-LTN’s US Major Stock Market Indexes Technical Analysis for the Week Ended 5 October 2018

Date Symbol Price Technical Analysis Support Resistance
5 October 2018 QQQ 180.15 Neutral (0.04) 179.29 180.66
5 October 2018 DIA 264.32 Very Bullish (0.50) 263.50 267.51
5 October 2018 SPY 287.82 Neutral (0.15) 287.18 290.91

 

Have a terrific week

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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