stock news Archives – Page 104 of 112

Bull Market Update: Brace for Potential 10% Correction

John Paul / August 20, 2023

Hayes Martin, a stock market strategist, has both encouraging and discouraging news for individuals with a positive outlook on the stock market. Starting with the downside, Martin anticipates that the continuous decline in the market will ultimately lead to a decrease of 8% to 13% in the market averages. (As of August, the S&P 500 index has already gone through a drop.) On the bright side, Martin assures that this upcoming decline will not mark the end of the positive market trend or the start of a negative market trend. I often count on Martin, the head of advisory company Market Extremes, for valuable information. I always make sure to give his emails my complete attention. It is important to mention that there is no professional agreement between his advisory service and my auditing firm when it comes to calculating the performance of his services. Martin sent an email in the afternoon of August 1st. In contrast to his previous emails, where he showed belief in the market’s expansion, this time he noted that the market’s internal elements were deteriorating. He acknowledged that although he doesn’t foresee a major drop, we should be prepared for a more significant temporary setback. Consequently, he recommended adopting a defensive approach in such situations. From August 1st to August 15th, there was a 3% drop in the S&P 500 SPX, whereas the Nasdaq Composite COMP experienced a decline of 4.6%. In a later email, Martin mentioned that his research shows there is still potential for further improvement in addressing this issue, with a range of 8% to 13%. However, he observed that the market’s internal factors have only slightly worsened, in contrast to the significant decline seen in previous bull-market highs. He also predicted that once this correction comes to an end, the progress is expected to continue. Considering Martin’s analysis, it is crucial to remember his previous statements from the past year and a half. For example, during the pessimistic market period in late May and early June 2022, he correctly foresaw a market rally, particularly in the technology industry, along with a possible growth ranging from 15% to 25%. The subsequent three months saw the Nasdaq Composite increase by 16.5%, proving the accuracy of his prediction. Following the conclusion of the rally, the bear market made a strong resurgence. By early October 2022, the Nasdaq erased the entire 16.5% gain it had experienced during the rally. At this point, Martin predicted a significant “reflex bounce” in the market, although he did not foresee a new bull market. This bounce would cause the market averages to rise by 10%-15%, with the technology-dominated indexes potentially seeing gains of 15-20%. The market reached its lowest point on October 12. While Martin initially did not expect a new bull market in early October and became more optimistic later on, he should be recognized for accurately predicting a powerful rally. If you trust Martin’s analysis, it would be advisable to make changes to your stock portfolios in order to adopt a more defensive approach. John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com

Market News

Analyzing August’s Stock-Market Trends: Will the Stumble Transform into a Rout?

John Paul / August 19, 2023

The drop in the American stock-market rally in August 2023 was anticipated. In a note on Friday morning, Tom Lee from Fundstrat stated that the S&P 500’s recent decrease of 5.6% over a 15-day period is a usual situation for August. Despite this, Lee, who is well-known for his positive outlook on the stock market, expects this decline to be temporary and connected to the month of August. In August, there are usually difficulties in the financial market, with high levels of unpredictability seen in the VIX reaching its highest point. Moreover, trading conditions tend to have low activity, particularly towards the end of the month, as the holiday season ends. The speaker states that stocks are being sold off due to several reasonable factors. These factors consist of a 50 basis point rise in the 10-year Treasury yield, causing it to reach its highest level in 15 years, the strengthening of the US dollar, and a long-awaited increase in the Cboe Volatility Index. Both the S&P 500 index and Nasdaq Composite suffered losses for the third week in a row on Friday. Additionally, the Dow Jones Industrial Average experienced a decline of 2.2% for the week. According to Lee’s definition, what conditions must be met in order for the slide to be classified as a significant decline, which is a 10% decrease leading to the S&P 500 reaching the level of 4,150? In order for the increase in yields to have a notable effect, Lee states that it would either have to present a risk of causing significant harm or require some other external disruption. Lee stated that he is not claiming that this is an impossible scenario. He gave an example to support his point, stating that if there is a sudden 10% rise in oil prices along with indications of increasing wages, it could potentially result in a larger decline in market value. The reason for this is that such factors might raise doubts among investors about the consistency of inflation reduction. Lee states that at present, inflation is not the primary worry for investors as their attention is primarily directed towards the rising bond yields, which have a detrimental impact on price-to-earnings ratios. They are also apprehensive about the prospect of a stronger U.S. economy, which could lead to the Federal Reserve implementing further interest rate hikes. Furthermore, Lee highlights the slight concerns among U.S. investors regarding weak economic data and property matters in China. Lee mentioned that there are signs in the market suggesting that stability may soon return. Firstly, he stated that the acceleration in the rate at which the 10-year yield is increasing is having a negative effect on stocks. However, it is not unusual for such abrupt increments to occur towards the end of a period when equities are being sold. He highlighted that the recent 50 basis point rise in the Treasury 10-year yield, which happened in just 21 days, is comparable to the increases in yield that were observed on September 23rd and March 2nd in the previous year. It is important to note that during those occasions, stocks reached their lowest point between 8 and 16 days later. Furthermore, the McClellan Oscillator reveals that there is currently an excess number of stocks, with a value of -50. This particular situation has only happened on 39 occasions since 1990. Lee’s analysis suggests that in 51% of these occurrences, stocks reached their lowest level within five days, while in 72% of cases, stocks reached their lowest level within 15 days. Lee proposed some dates that could hold importance for the future of the market. One of these dates is August 24th, which comes after Nvidia, a company that manufactures chips, discloses its financial performance for the second quarter. The outstanding outcomes that Nvidia achieved earlier in the year were understood to have sparked enthusiasm around artificial intelligence, ultimately causing a rise in the stocks of major technology companies. On Friday, August 25th, investors will be paying attention to Federal Reserve Chair Jerome Powell, who is scheduled to deliver a speech at the annual symposium of the Kansas City Fed in Jackson Hole, Wyoming. Lee remembered that Powell’s speech in Jackson Hole last year indicated the conclusion of a recovery for the S&P 500, resulting in a subsequent drop of 19% in stock prices over the ensuing eight weeks. He was unsure if stocks would see a 20% increase after this year’s Jackson Hole conference, but he admitted that unforeseen events could still happen. John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com

Market News

New Day, New Hope: U.S. Stock Futures Rise, Focus on Walmart

John Paul / August 17, 2023

On Thursday morning, the futures for U.S. stock indexes experienced a slight rise after previously reaching a six-week low, which was caused by the surge in bond yields. How are stock-index futures trading On Wednesday, there were declines in the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite. Specifically, the DJIA saw a drop of 181 points, the S&P 500 decreased by 34 points, and the Nasdaq Composite fell by 156 points. What is propelling the markets forward? The increase in bond yields has had an impact on the stock market, leading to uncertainty in the futures market. After the Federal Reserve released meeting minutes suggesting a possible increase in borrowing costs to manage inflation, government bond yields reached their highest level in 15 years. This caused the S&P 500 index to close at its lowest point in six weeks. As a result, investors are now reconsidering the timing of inflation concerns and whether higher interest rates will last longer than anticipated. Technology stocks, particularly the Nasdaq and S&P 500, have been heavily affected by the wave of selling due to their sensitivity to higher interest rates. Nonetheless, the overall market performance remains positive, with the Nasdaq up 29%, the S&P 500 up 15%, and the Dow Jones Industrial Average up 5% for the year. Cisco Systems, a manufacturer of network equipment, is anticipated to have a positive impact on the technology industry on Thursday as its stocks are predicted to rise by over 2% in the premarket. This follows the announcement of impressive quarterly earnings by the company, which were made public after the market closed on Wednesday. In the United States, there will be various economic updates on Thursday. These updates consist of two important events: the weekly report on initial jobless benefit claims as well as the August Philadelphia Fed manufacturing survey, both set to occur at 8:30 a.m. Eastern time. Furthermore, the leading economic indicators report is expected to be released at 10 a.m. on the same day. Mark Newton, Fundstrat’s head of technical strategy, advises keeping a close watch on Treasury yields, comparing it to the vigilant observation of a prey by a “Hawk-eye”. According to him, the recent rapid decline in stock prices coincided with both TNX and TYX surpassing the 4.00% mark. The TNX XX:TNX and TYX XX:TYX are the CBOE indices that indicate the yields of 10-year and 30-year Treasury bonds. Newton mentioned that the previously mentioned support level for SPX, ranging from 4350 to 4400, will be tested sooner than anticipated. Despite this decline, Newton remains confident that it is only a temporary setback and expects a resurgence in the market afterwards. However, it is possible that this rally will be postponed until after the Jackson Hole summit. The Jackson Hole Economic Symposium, which is expected to feature a speech from Federal Reserve Chair Jay Powell, has been planned for the dates of August 24th to 26th. Companies in focus John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com

Uncategorized

Bull vs. Bear: The Summer Challenge That Could Shape the Stock Market

John Paul / August 14, 2023

Historical records show that August and September tend to be tumultuous months for the American stock market. Therefore it would not be surprising that there is instability during the beginning of the month. Since the S&P 500 index grew by 20% from January to July 2023 many investors have been hoping that the market would balance out after a sharp rise. As of October 16 the market has increased by 25% since its lowest point after the bear market which occurred on October 12 when it was 3,577.03 What could possibly put an end to the 2023 rally? Essaye commented in a note last week that if this situation materializes it would significantly weaken the three cornerstones of the rally; as such investors should prepare for a significant drop in stocks regardless of the recent retreat. He continued to mention that in the event of this happening more than 10% reduction can be forecasted thus possibly erasing almost all the enhancement of stocks since June and conceivably all the profits made this year. That scenario has yet to materialize. Last week it was reported that the US consumer price index had gone up from 3% in June to 3.2% in July which was higher than the rate from the previous year. On the other hand the core rate (excluding food and fuel prices) had decreased from 4.8% to 4.7% The July producer price index which records wholesale costs was a bit more favorable than anticipated; however investors still think the Federal Reserve will hold the rate when they convene in September. Policy makers are anticipating to view another collection of employment information such as the August job report and inflation numbers before their upcoming meeting. At the same time a sharp increase in Treasury yields with the 10-year interest rate surpassing 4.15% after peaking at its highest point since 2023 near 4.2% is causing the stock market to remain weak. This rise in bond yields makes government bonds more attractive than other investments as well as increasing businesses’ expenses when it comes to borrowing money. The price of stocks has climbed since the end of last year as investors’ fears ended up not being realized however that trend has now come to an end. The market rally was sparked by a pessimistic environment but the idea that inflation the Federal Reserve and the economy will be in balance — referred to as a “Goldilocks” situation — could spell trouble for those who are overly optimistic according to Hackett. Although these expectations don’t seem too extreme at the moment they still should be monitored closely. Investors are concerned about the typical patterns seen throughout the year. According to data provided by Dow Jones Market Data the S&P 500 has been relatively inactive in August in comparison to other months in the year since 1928. It has shown a mere increase of 0.67% which ranks August fifth as the worst month for the S&P 500. Meanwhile September stands as the worst with an average decline of 1.1% And then there’s volatility. He advised that attempting to be overly shrewd with the market is not ideal since it is likely going through a typical time of stabilization. He declared that it will not continue enduring a prolonged period of hardship. John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com

Market News

Walking the Tightrope: How Tech Stocks’ Downturn Could Shake 2023’s Stock-Market Rally

John Paul / August 13, 2023

The Nasdaq-100, being the leading performer among key U.S. stock indices this year, has just encountered its toughest two-week period since December, according to data from Dow Jones Market. On Friday, the tech-focused index ended a fortnight slide of 4.6%, dropping 100.77 points or 0.7%, to close at 15,028. This signifies the most significant loss since December 23 when the index witnessed a 5% retreat, according to Dow Jones Market Data. The latest information indicates a dip in the usually robust market momentum of surging technology stocks. According to a report from Wednesday, the widely tracked Invesco QQQ Trust Series 1 QQQ exchange-traded fund on the Nasdaq-100 index, for the first time since March 10, concluded below its 50-day moving average, as shown by FactSet data. The index has consistently finished below its moving average for three consecutive sessions. Technical analysts interpret this as a possible sign of the index’s gains in 2023 continuing to dwindle. Approximately 40% of the Nasdaq-100’s worth is composed of a handful of highly valuable large tech stocks. The diminishing strength of a number of these important stocks, which played a major role in the U.S. market’s rebound in 2023, is amplifying fears that the market may be edging towards a more substantial and possibly widespread sell-off. The shares of four prominent firms, referred to as the “Magnificent Seven” – Apple Inc., Nvidia Corp., Microsoft Corp., and Tesla Inc., all concluded the week below their 50-day moving averages. Experts infer that signs of a growing technology rundown may be subtly concealed within the market’s structure. BTIG’s chief technical analyst, Jonathan Krinsky, issued a research note to clients and the media on Thursday. In this note, he suggested that QQQ, along with several other tech-based ETFs, is coming close to a “volume pocket.” This implies these ETFs may face a swift decline in their value. A review of the volume-at-price data over the last three years indicates that a sustained decrease below $368 for QQQ might lead to its quicker liquidation. This prediction relies on previous volume-at-price analysis, a tool used by stock market specialists to find possible areas of support and resistance for a certain security. Krinsky conducted an examination of the trade volume of a particular security at diverse price levels within a set time period, utilizing the volume-at-price assessment. His investigation encompassed data from the last three years. In a phone interview with MarketWatch, Krinsky revealed that support and resistance mechanisms are dependent on the historical values of prices. He went on to explain that due to the participants’ incomplete memory of price ranges within these confines, there can be a faster rate of price fluctuations, Krinsky further discussed. Krinsky highlighted that QQQ experienced a roughly 16% increase over a period of six weeks from the end of April to mid-June. This substantial growth implies the risk of a potentially faster decline. As of the market close on Friday, QQQ has observed a 37.5% growth since the beginning of the year, a fact supported by FactSet data. Analysts have credited various factors for the retreat, including over-focused investment, overvalued high-performing stocks, rising treasury yields, and corporate earnings that failed to meet the lofty expectations of investors. Rising Treasury yields have heightened the stress on stocks, especially on high-performing tech stocks which are significantly vulnerable to fluctuations in interest rates. The main worry currently is whether the ongoing deterioration of Big Tech will pull the broader market down with it, or if other market segments will step up to offset this deficit. Here’s the thing: The significant recalibration that happened on Monday led to four major changes in the Nasdaq 100. James St. Aubin, the main investment director at Sierra Investment Management, indicated that it seems investors are content to divert their attention to other areas of the market that are not as significantly valued as the large tech companies. St. Aubin informed MarketWatch during a phone discussion that the leading participants are seeing a reduction in their lead, but the ones lagging behind are starting to close the gap. He added that it would be more concerning if funds were consistently being withdrawn and being reinvested in cash and bonds. U.S. stocks saw a minor uptick on Thursday, but couldn’t hold onto the majority of their early gains. The market got a lift initially when the July inflation data came out, matching economists’ forecasts. However, the President of the San Francisco Fed, Mary Daly, asserted that considerable efforts are still needed from the Fed to manage inflation. This resulted in higher Treasury yields, which caused a swift turnaround in the stock market. The S&P 500 SPX ended the day with a fall on Friday, marking a reduction of 4.78 points or 0.1%, finishing at 4,464.05. This signals the second week in a row of decreasing performance. The Nasdaq Composite COMP, which includes a broader selection of stocks than the Nasdaq-100, also experienced a descent of 93.14 points or 0.7%, concluding the day at 13,644.85. The Dow Jones Industrial Average (DJIA) experienced a positive growth, rising by 105.25 points, an increase of 0.3%, to reach 35,281.40. The 10-year Treasury yield BX:TMUBMUSD10Y experienced a significant increase last Friday, rising to 4.156%, its peak for the week, as shown by data from Dow Jones Market. John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com

Market News

Baby Boomers and Stock-Market Risk: Striking the Perfect Portfolio Balance

John Paul / August 11, 2023

As the baby boomer generation approaches retirement, a note of caution arises concerning their stock holdings. Presently, a significant 37% of baby boomers maintain a higher level of equity holdings than advised by Fidelity Investments for their life stage. This insight comes from Mike Shamrell, Fidelity’s Vice President of Thought Leadership. Baby boomers, born between 1946 and 1964, are either nearing or have already entered the retirement phase. The average proportion of equity in baby boomers’ Fidelity retirement accounts currently sits at 65.8% as of the second quarter, comfortably falling within Fidelity’s recommended equity range of 47% to 67%. However, a careful warning is extended to the 37% of baby boomers who carry a more significant exposure to equities. After recent market gains, these individuals should consider rebalancing, as recommended by Shamrell. The S&P 500 has recorded an increase of approximately 17% this year. Derek Pszenny, Co-Founder of Carolina Wealth Management, emphasizes the importance of retirees thoroughly assessing potential risks, including the risk of outliving their funds, inflation, and establishing a sustainable withdrawal rate from their retirement accounts. “Investing is dependent on time, not just age,” notes Pszenny. “The more you withdraw, the greater equity exposure is needed.” Fidelity’s recommended equity holdings offer a range within 10% of the Fidelity Equity Glide Path calculation. A tool is available to estimate the time until retirement and determine the suitable portfolio distribution for individuals nearing retirement. For example, if retirement is anticipated within a decade, the tool suggests that Fidelity Freedom 2035 currently holds 79% equity. This indicates that a portfolio with equity ranging from 69% to 89% would be considered appropriately aligned with the stock market based on the time until retirement. “These are suggested levels, tailored to individual uniqueness and distinct goals. These are recommendations,” clarifies Shamrell. “Take the time to assess and find the level that brings you peace of mind.” It’s important to note that many baby boomers may still possess pensions alongside their 401(k) plans and other investments such as real estate. Due to their entry into the workforce before the emergence of 401(k) accounts, auto-enrollment, and target-date funds, this demographic might find themselves less aligned with younger investors, as explained by Shamrell. Fidelity’s target-date funds extend an investor’s retirement plan throughout their lifetime, surpassing the actual retirement date. “Investors may experience 15, 20, or even more years of retirement. Preventing the depletion of savings prematurely is critical,” emphasizes Shamrell. A fundamental tenet within the realm of investments suggests that as investors approach their retirement goal, a gradual reduction in equity exposure is advisable. For baby boomers nearing retirement, this translates to a shift from stocks to bonds or cash, as outlined by the Vanguard Group, another investment advisory firm. “While age might impact the mix of asset allocation, it’s essential not to be swayed solely by averages and trends. There’s no universal formula for investors. To determine the optimal asset allocation mix, investors – irrespective of age – should factor in their goals, time horizon, and risk tolerance,” explains Nilay Gandhi, a Senior Wealth Adviser at Vanguard. “For investors deliberating when and how to pivot, consulting a financial adviser can be beneficial. Timing retirement can be intricate,” recommends Gandhi. For the typical retiree, Pszenny suggests an equities exposure ranging from 50% to 75%, accompanied by an annual withdrawal rate of 4% to 5%. “I’m quite confident that they can meet their retirement goal without depleting their savings,” Pszenny asserts. Pszenny raises concerns about target-date funds due to the common misconception surrounding the fund’s time frame – whether it guides individuals to their retirement date or spans their entire lifetime. “The most crucial investment decision revolves around asset allocation. Each individual should determine the quantity of equities they hold and how it’s allocated,” Pszenny concludes. John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com