Commentary: Paul Ebeling on Wall Street

Commentary: Paul Ebeling on Wall Street

$DIA, $SPY, $QQQ, $RUTX, $VXX

FLASH and Saying it Again: Stocks overreacted to the FOMC’s rate decision in the minds of investors, WH advisor calling for an emergency meeting of the committee to cut rates further.

  • President Trump plays the tariff card to pressure Fed Chairman Powell,
  • The market has become susceptible to every China headline, nothing new.

Savvy Money is Betting Both Sides of the US-China Trade Dispute

The DJIA, NAS Comp and S&P 500 futures are substantially up as I writ this early Monday, on China trade dispute comments from President Trump.

Last week was volatile, but remember the market is consolidating a 7+ month run. This market for some is hard to trade, with headline-driven action and few Top stocks in Bullish base patterns.

Recognize the market climate, and just because we are a confirmed stock market rally does not mean being fully invested and/or heavily margined.

President Trump Tweeted Sunday that the US is “talking” with China. He also told reporters that Apple CEO Tim Cook “made a very compelling case” that China tariffs are making it hard for the iPhone maker to compete with SKorea-based Samsung. But the President said he does not want “to do business at all” with China telecom gear giant Huawei, saying it’s a national security threat. That followed reports that The Trump Administration would extend a license for companies to do some business with China’s Huawei for the next 90 days.

With a strong Bull market or a correction, the course of action is clear. But in a volatile up-and-down market, choices are not easy.

In a volatile market, a Top stock might break out, only to reverse lower with the market. Or, when stocks and overall market are range-bound, buying a breakout the stock could quickly return to the lows of the range.

When the stock market dives over several sessions, the 1st confirmed stock market rally after a “vertical violation” often fails. In general, markets do not usually rebound straight up, but take time.

That can be a good thing.

Stocks, even leaders, tend to follow the market. Well, the stock market hit new highs less than a month ago. That’s not enough for many new bases to form.

And of course, these are the Dog Days of August, and savvy participants have cash ready for new buying opportunities down the road.

Remember, if you are not vacationing in the South of France and playing this market, pay attention, it is your money, and your responsibility.

Note: HeffX-LTNs overall technical outlook for the SPX is Neutral with a Very Bullish bias, again.

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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