Home Investments Commentary: Paul Ebeling on Wall Street

Commentary: Paul Ebeling on Wall Street




“August sentiment says, there is no Bubble in this market”— Paul Ebeling

Last week

US stock funds saw their largest inflows in 9 wks as strong central bank support means there is no alternative to equities to generate returns.

US stock funds attracted $12.8-B in the 7 days ending 18 August.

Worldwide, investors poured $23.9-B into equities in the frame and pulled $4.5-B from cash funds, the 1st outflow in 5 wks.

All of our Key technical indicators are Very Bullish in here.

The Technicals

The large-cap indices tested the 50-Day MA. And all 3 of the major indices rebounded. The Nasdaq rebounded to hold the 50-Day MA on the close and posted a gainer. The DJJIA bounced to a tight Doji, a good signal of more to come. The S&P 500 rallied off of its test above the 50-Day MA putting is positive close.

In general, tests of the 50-day MA for the large-cap indices have proven to be an entry point for pretty much all of Y 2020 and 2021.

So, if this market continues to play by the same rules, the large-cap stocks are buys.

What to expect this week

There will be lots of appeals so to speak in the House this week with respect to the infrastructure bills. The House is back from its recess and reports suggests moderate and progressive Democrats are not on the same page with their views. The former want the $1.2-T bipartisan plan passed 1st before considering the $3.5-T ($5.4-T) budget resolution and the latter want the opposite.

Also, there will be some Key procedural votes this week, but no votes that authorize any actual spending. So ignore the Capital Hill drama.

The Jackson Hole Economic Symposium: Fed Chairman Powell holds the Key to it. He will be giving a speech Friday and market participants are waiting to hear if he drops any tapering timeline hints. Expect no change and no solid hints, so a non event.

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 still Bullish with a Very Bullish bias in here. But pay attention, as 56% of all recommendations on S&P 500 companies at Buy, Wall Street is the most Bullish it has been since Y 2002 that is a contrarian indicator

Stay alert 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.