Home Knightsbridge Insights Commentary: Paul Ebeling on Wall Street

Commentary: Paul Ebeling on Wall Street




‘The sentiment for August is buy now or be left behind”— Paul Ebeling

What happened last month

The broader global growth story the entire stock market is tied to is not a lock n. In fact, and the VirusCasedemic chaos over inflation earlier this yr and expectations that the benchmark 10-yr T-Note yield would go higher, surprised and went South, as market understood growth peaked in Q-1 and started trending down at the end of the Quarter.

The rate story was wrong, but slower economic growth is now higher up on the list of investor concerns for a US market where P/E ratios are high.

Big tech represents 23% of S&P 500 and that means whatever the market next decides about its valuations will determine the prices of US stocks overall.

What happened last week

On Wednesday through Friday of last week, the S&P 500 trading volume was below its 30-day average.

For the short-term trader, a rotation away from the large-cap leaders into small-cap represented by the Russell 2000, which are very oversold since its torrid hot streak in early 2021, could make sense.

Small-caps went parabolic through March and April and have not worked since because they got so far ahead.

That makes them technically based on 100-day trailing returns, cheap now.

But for investors not playing the market for a quick trade the post-earnings disappointing trades from Apple, Facebook and Microsoft should not weigh too heavily. 

Amazon was the outlier in actually missing revenue expectations rather than posting a big beat, making a selloff on the news a fair reaction.

What to expect this week

Earnings continue to grow and their amount of earnings leverage is huge, there are lots of T’s on the sidelines.

All of our technical indicators are Bullish with a Very Bullish bias in here. But pay attention, it is your money, thus, your responsibility.

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.