Wall Street Finally Saw the Expected “Dip” in The Trump Rally

Wall Street Finally Saw the Expected “Dip” in The Trump Rally

Wall Street Finally Saw the Expected “Dip” in The Trump Rally

$DIA,  $SPY,  $QQQ,  $VXX

Wall Street dipped Tuesday as investors took some profits after the record Trump Rally run, and maybe some nervousness ahead of the Key healthcare vote Thursday

The S&P 500 and DJIA put in their worst 1-day performances since before Donald Trump’s election victory in November.

The S&P Financial Index sank 2.87%, its biggest daily decliner since June.

Banks benefit from higher interest rates and their stocks are sensitive to changes in expectations of how quickly the Fed will adjust interest rates.

There was a feeling on Wall Street that the Fed was going to be more “hawkish” last week. That did not happen, taking a little out of the higher rates that the banks want.

GOP lawmakers aim to move controversial healthcare legislation to the House floor for debate as early as Thursday. Expectation are running high.

Some on Wall Street see The Trump Administration struggling to push through the healthcare overhaul as a sign he may also face setbacks delivering promised corporate tax cuts.

Expectations of those tax cuts are a Key reason for the 10% run North in the S&P 500 since his election.

The Wall Street financial sector has been the best performing of the 11 major S&P sectors since Donald Trump’s election, rising 18% on his proposals to cut bank regulations and reduce taxes.

During The Trump Rally, Wall Street has become unaccustomed selloffs. The last time the S&P 500 lost 1% or more in a day was 110 trading sessions ago on 11 October. Over the past 2 years, the S&P 500 has suffered losses of 1% or more in about 1 in every 11 sessions, according to the data.

The S&P 500 is trading at about 18X forward earnings estimates Vs the long-term average of 15, according to the data.

Tuesday, decliners outnumbered advancers on the NYSE by a 3.92-to-1 ratio; on Nasdaq, a 5.25-to-1 ratio favored decliners.

Tuesday, the major US stock market indexes finished at: DJIA -237.85 at 20668.01, NAS Comp -107.70 at 5793.83, S&P 500 -29.45 at 2344.00

The CBOE Volatility index, Wall Street’s “fear gauge”, raised 10%.

Volume: Trade was heavy, 8.3-B shares changed hands in US exchanges, compared with the 7.1-B daily average over the last 20 sessions.

  • NAS Comp +9.6% YTD
  • S&P 500 +6.0% YTD
  • DJIA +5.8% YTD
  • Russell 2000 +2.0% YTD
HeffX-LTN Analysis for DIA: Overall Short Intermediate Long
Neutral (0.10) Neutral (-0.05) Neutral (0.02) Bullish (0.33)
HeffX-LTN Analysis for SPY: Overall Short Intermediate Long
Neutral (0.18) Neutral (-0.05) Neutral (0.04) Very Bullish (0.54)
HeffX-LTN Analysis for QQQ: Overall Short Intermediate Long
Neutral (0.23) Neutral (0.15) Neutral (0.05) Very Bullish (0.50)
HeffX-LTN Analysis for VXX: Overall Short Intermediate Long
Bearish (-0.30) Neutral (-0.20) Bearish (-0.31) Bearish (-0.38)

Stay tuned…

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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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