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Commentary: Paul Ebeling on Wall Street




“August sentiment: Buy now or be left behind”— Paul Ebeling

Last week

The big-name NAS issues moved higher, but the small-cap and mid-cap stocks led

The NAS comp and the S&P 500 marked new highs and the small-caps and mid-caps bounced on short covering ahead of the NFPs in case it was stronger than expected.

Sentiment has turned bullish, as Goldman Sachs ups its target and record numbers of retail investors hit the market.

Ahead of the Friday’s NFP report, the hammered stocks were bid, the leaders were sold modestly.

The Russell 2000 and the S&P 400, which represent the small-cap and mid-cap stocks, led higher after lagging for months. Both indices posted market-leading moves last Thursday, but, in terms of the bigger picture, they are still in the lateral consolidation mode, in short, they took the lead Thursday but they are still lag.

The SOX was the leader last wk, as it posted a 6-session surge to a new high, faded after gapping up again, and paused

What to expect this week

The MSM is busy warning that the US economic growth has topped, and the Covid Delta variant will resume shutting economies around the world.

Yes, fear is good for selling papers, but the US is just in the early innings of a Strong economic recovery, that being the case the stock market is going to continue trending North.

Modern Monetary Theory (MMT) is alive in Europe after the ECB boosted its QE and declared that it would not change interest rates until inflation reached a 2% annual rate.

This ECB action weakened the EUR and caused foreign capital to pour into the US seeking positive yields, Vs the negative yields that are common in Europe.

Earnings continue to grow, the amount of earnings leverage is huge, there are lots of T’s on the sidelines that will come into this market sooner or later.

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