Here’s the summary of what seems to matter:
Trade wars are bad, but so far we’re not in a trade war.
We have a a mixed bag of technical signals, but the underlying fundamentals appear pretty solid.
Yields are rising, but apparently they’re still not enough to draw yield seekers away from the stock market.
The BigFoot database of long positions has declined to the lowest point it’s been in over two years, but it appears to be stabilizing at these levels. The DJIA, S&P500, and NASDAQ Indexes all have sell signals, but the the Macro Indicators remain long.
Last week the 100-day moving average provided support for the S&P500, and the 50-day moving average was blown through after Friday’s strong jobs number. So the 50-day now gets to potentially change rolls, providing support for the index. That puts the number to watch at 2742 for Monday — though it may rise through the week toward 2750.
On the upside, we’re looking at 2800 as the first line in the sand, with 2825 next on the chart. From there, we’ll start talking about taking out the highs for the year… but one step at a time.
The futures are indicating a positive start to the week. Given the talk of trade wars, tariffs will likely be the key news narrative. The set-up is for a move over 2800. If a pull-back comes, look at the 50-day moving average as the first line of defense. The 100-day is second. A move below that and we should examine the news cycle — things would have to be pretty ugly at that point as we’re talking about a short-term technical fail at that point. Otherwise, 2800 is the number to watch — and we could break through that early Monday morning and spend the rest of the week inching higher from there.
IMPORTANT DISCLOSURE INFORMATION
Please remember that past performance may not be indicative of future results. Different
types of investments involve varying degrees of risk, and there can be no assurance
that the future performance of any specific investment, investment strategy, or product
(including the investments and/or investment strategies recommended or undertaken by
BigFoot), or any non-investment related content, made reference to directly or indirectly
in this blog will be profitable, equal any corresponding indicated historical performance
level(s), be suitable for your portfolio or individual situation, or prove successful. Due
to various factors, including changing market conditions and/or applicable laws, the
content may no longer be reflective of current opinions or positions. Moreover, you
should not assume that any discussion or information contained in this blog serves as the
receipt of, or as a substitute for, personalized investment advice from BigFoot. To the
extent that a reader has any questions regarding the applicability of any specific issue
discussed above to his/her individual situation, he/she is encouraged to consult with the
professional advisor of his/her choosing. BigFoot is neither a law firm nor a certified
public accounting firm and no portion of the blog content should be construed as legal
or accounting advice. A copy of the BigFoot’s current written disclosure statement
discussing our advisory services and fees is available for review upon request.