Market Direction

Yesterday stocks closed at session lows for a second time this week.  To think last year we only saw two session low closes the entire year!   What does that tell us?

Clearly this is not the same market we've grown accustomed to the last few years.

Yesterday the $SPY failed to rally $8, which means for the first time in what has felt like years, the $SPY posted a negative month.

Are we going to start another 15+ consecutive month rally from here?

After the tumultuous February of 2018, we head to March putting the bevy of 1,000 pt Dow Jones Industrial declines in our rear view mirror.  It's interesting to look back at the market, but what really matters to all of us, is what lies ahead.

There is no definitive path, but clearly the odds are growing for another retest of support that we hit just weeks ago,  JB posted a great chart outlining that possibility in the chat room this morning.

What has me siding on the upside side of things remains the price action in the $AMZN's  $NFLX's $TWTR's $GOOGL $AAPL anf $FB's.   All have remained resilsient this week despire the late day market collapses.  Many financials were hitting record highs this week with $JPM nearing the $120 figure.  Financials are likely to continue higher this year.

I wrote last year that financials could be the leaders going forward, and that could help spark the next leg higher for equity prices.

An Inverted Financial Crisis

Despite yesterdays swoon, bonds rallied.  This morning they are rallying some more.

Inflation remains the headline to watch in 2018 thus far, with the 10 year and its key 3% level as the chart to watch.  Watch the bonds!

Friday Focus: A Near 40 Year Trend Ready to Break

I do think the low price utopia is nearing an end, meaning inflation will take the baton from deflation moving forward.  As such, with the market always looking forward, we have to think the market may be seeing this inflation spike coming sooner than any FED official would care to admit.  But how soon?   If we are talking a year or 18 months, this market has a good 6+ months of more unabated record highs.  Anything less than that and we very well may have seen the market highs for quite a while.

With debt levels  higher than any time before in the history of the world, higher interest rates aren't going to be nice to those who want to pay back that debt.    The question is just how close we are to the day of interest rate reckoning?   And... when we near that day what will the FED do to avert a debt default death spiral?

Have a great day see you in the chat room.

Known to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

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