Use Strength To Sell Dec./Jan. Rally
INVESTORS first read.com – Daily edge before the open
S&P 500: 2,643
Tuesday, January 29, 2019 8:45 a.m.
Sept. 21, 2018 : Raise cash to 50% (DJIA: 26,656)
Nov. 8, 2018: Raise cash to 75% (DJIA: 26,180)
Dec. 26, 2018 Doom Thick Enough for a Rally (DJIA: 21,792)
President Trump is threatening another shutdown, odds are that won’t happen. That doesn’t mean the market gets a pass between now and the Feb. 15 deadline when Trump and Congress have to make a decision on keeping the government open. I can see a two-day shutdown, at worst, but a week or more, is not going to happen. Great in-out trader’s buy/sell. The CBO reports this shutdown cost $11 billion, $3 billion of which will never be recovered.
Is this untethered stupidity really happening ? If it was a flick, we’d be laughing, but is smacks of a government out of control, That spells SELL.
The market is currently dealing with Q4 earnings, a period of high-angst where a company is pressed to “beat” the Street’s estimates by a healthy margin or risk a huge hit to its stock.
In addition to the, “will we, or won’t we” keep the government open, the Street is constantly coping with the on again-off again newsfeed about the U.S./China tariff dilemma.
But, the most important driver here is the Fed. If they are spooked enough by a slowdown in the economy, they may opt out of additional rate increases this year, and make statements to that effect in coming weeks to give the economy (and market) a shot in the arm. Then again maybe they won’t !
Q4 earnings will jog the market up and down. This will make tracking a trend in the market difficult. I technically analyzed each of the DJIA 30 stocks then used the Dow “divisor