Home 2021 Commentary: Paul Ebeling on Wall Street, “The Bulls are in Charge”

Commentary: Paul Ebeling on Wall Street, “The Bulls are in Charge”

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The Bulls are in charge” — Paul Ebeling

Monday’s S&P 500 futures Vs fair value: +23.30. NAS Comp futures Vs fair value: +56.50.

What happened last week

The S&P 500 (+1.2%) set intraday and closing record highs Thursday, Topping the 4000 mark for the 1st time, in a broad-based advance. The NAS Comp (+1.8%) and Russell 2000 (+1.5%) outperformed the benchmark index with solid gains, while the DJIA (+0.5%) lagged, but rose modestly. 

There was a confluence of positive developments Last Thursday.

To name a few, the ISM Manufacturing Index for March jumped to 64.7% from 60.8% in February for its 10th straight expansionary reading, 1st-of-the-month inflows helped drive equities higher and Treasury yields lower, and the mega-caps led. 

The mega-cap leadership was represented in the outperformances of the S&P 500 information technology (+2.1%) and communication services (+2.1%) sectors, although the energy sector (+2.7%) advance the most. The defensive-oriented healthcare (-0.2%), consumer staples (-0.2%), and utilities (-0.02%) sectors closed lower. 

The Philadelphia Semiconductor Index (+3.7%) was another pocket of strength.

Energy stocks drew support from higher oil prices following an OPEC+ policy meeting. The group agreed to cautiously increase output from May through July with Saudi Arabia easing on its extra 1-M BPD cut. WTI Crude Oil futures settled higher by 3.8%, or 2.22, at 61.41bbl.

The Technicals

The NAS 100 pasted the 50-Day EMA running up to the 50-Day SMA on the session high. In the end, the NAS 100 cleared the 50-Day EMA but did nor reach to the 50-day SMA.

The S&P 500 looked as if it was going to become the new market leader as it ran past the mid-March all-time high. It actually missed out on the all-time closing high by 2 pts.

What to expect this week

The upcoming corporate earnings season will offer investors insight on the sustainability of this Bull run that has taken stocks to all-time highs.

Evidence of strong economic and corporate growth should support investor confidence after a Quarter that saw solid stock gains.

History suggests stocks will keep driving this month, with the S&P 500 tallying its highest average gain in April out of any month over the past 20 yrs

Corporate results are due in earnest starting in mid-April and overall S&P 500 Q-1 earnings are expected to spike 24.2% from a year ago, according to Refinitiv IBES.

Have a healthy 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.