Commentary: Paul Ebeling on Wall Street, Counting Down to the Election

Commentary: Paul Ebeling on Wall Street, Counting Down to the Election

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$DIA $SPY $QQQ $RUTX $VXX

The success of The Trump Economy, and it is strong, is the stock market’s driver”— Paul Ebeling

Last week’s action

The Black Swan has flown away, President Trump is Covid immune and back in full swing.

Last Friday, not much was scheduled, but when President Trump said that he wanted to make a “big deal” with the new aid/relief/stimulus package, futures jumped. And the leaders closed on session highs.

The recovery into resistance continues as small and mid-cap stocks continue to lead.

The PHLX Semiconductor Sector (SOX) is closing in on the September highs and is just days away.

The financial pundits are talking about the fact that stimulus is the driver of this rally.

After the markets closed Friday, 1 of them was at a loss as to why the market rose, as House Speaker Pelosi (D-CA) rejected piecemeal stimulus for areas of the economy that are in need. 

But, maybe stimulus is not driving this Northside action. As the market was rallying when people believed that there were no negotiations.

It was only when it was revealed that there were stimulus talks going on that the market turned volatile.

The fact that stocks rallied across the board, on a day that stimulus hopes were dashed, tells us that stocks are not rallying because of a stimulus bill.

Similarly, they rallied a week ago until news broke that President Trump had tested positive for COVID-19. 

When you all of this together, is a really good thing to have in a rally, that is the market rallying regardless of whether more stimulus is coming or not.

And after-hours, President Trump came out and said he wants a “big deal” for stimulus. Traders like Cheap Money. So does the economy.

Technical Analysis

NASDAQ: The NAS Comp continued higher after filling that 3rd downside gap and is currently moving up toward filling the 2nd gap. I would like more power as it breaks higher from that inverted head-and-shoulders pattern. Many areas inside the NAS are working well and are moving North.

S&P 500: Thanks to Big Blue splitting in 2, the S&P 500 gapped over the 8 September upper gap mark and is taking on the 3 September closing mark. This move was good a short on volume but breadth was solid.

This week

Monday is Columbus Day, and some US financial markets will be open in observance of the federal holiday, bond traders will get the day off, equity markets will remain open for business. The NYSE and NASDAQ will both be open regular hours.

Commodity futures markets on the Chicago Merc will remain open Monday, though some tropical product commodities that trade on the Intercontinental Exchange will not trade.

It is also a holiday in Canada Monday for that country’s Thanksgiving Day and the Toronto Stock Exchange will be closed

Looking ahead: US consumer prices are expected to rise in September for a 4th month running following a sharp drop at the height of The China Act of War Virus lockdowns.

The Covid-19 recession scrambled prices for an array of goods and services, but overall inflation pressures are expected to remain muted, allowing the Fed to keep its easy-money policies in place, as I say, the market likes cheap money

The International Monetary Fund (IMF) releases forecasts for global economic growth that are expected to show a less-severe contraction in 2020 than initially anticipated.

Again, the success of The Trump Economy, and it is strong, is the stock market’s driver.

Pay attention, always take what the market gives.

Have a healthy week, Keep the Faith!

  

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Paul Ebeling

Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he it 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.