Best of the Week
Most Popular
1. Ray Dalio: This Debt Cycle Will End Soon - John_Mauldin
2.Stock Market Dow Plunge Following Fake US - China Trade War Truce - Nadeem_Walayat
3.UK House Prices 2019 No Deal BrExit 30% Crash Warning! - Nadeem_Walayat
4.What the Oil Short-sellers and OPEC Don’t Know about Peak Shale - Andrew_Butter
5.Stock Market Crashed While the Yield Curve Inverted - Troy_Bombardia
6.More Late-cycle Signs for the Stock Market and What’s Next - Troy_Bombardia
7.US Economy Will Deteriorate Over Next Half Year. What this Means for Stocks - Troy_Bombardia
8.TICK TOCK, Counting Down to the Next Recession - James_Quinn
9.How Theresa May Put Britain on the Path Towards BrExit Civil War - Nadeem_Walayat
10.This Is the End of Trump’s Economic Sugar High - Patrick_Watson
Last 7 days
How A NASA Scientist Could Trigger The Next Cannabis Boom - 17th Dec 18
iShares Russell 2000 IWM Leading Stock Market Decline - 17th Dec 18
Where is the Dow Stock Market Santa Rally? - 17th Dec 18
With Weaker Climate Consensus, Expect Elevated Climate Change - 16th Dec 18
SMIGGLE Advent Calendar 2018 UK Contents - What You Get Look Inside Review - 16th Dec 18
Is there a Lump of Coal in Santa's Stock Market Bag? - 16th Dec 18
This Market Will Drive Gold in 2019… - 16th Dec 18
Gerald Celente:Central Banks Can’t Stop a 2019 Debt Disaster - 16th Dec 18
Gold Stocks Triple Breakout - 15th Dec 18
The stock market fails to rally each day. What’s next for stocks - 14th Dec 18
How Low Could the S&P 500 Go? - 14th Dec 18
An Industrial to Stock Trade: Is Boeing a BUY Here? - 14th Dec 18
Will the Arrest of Huawei Executive Derail Trade War Truce? - 14th Dec 18
Trump vs the Fed: Who Wins? - 13th Dec 18
Expect Gold & Silver to Pullback Before the Next Move Higher - 13th Dec 18
Dollar Index Trends, USDJPY Setting Up - 13th Dec 18
While The Stocks Bulls Fiddle With The 'Fundamentals,' Rome Burns - 13th Dec 18
The Historic Role of Silver - 13th Dec 18
Natural Gas Price Setup for a Big Move Lower - 13th Dec 18
How to Get 20% Off Morrisons Weekly Supermarket Shopping - 13th Dec 18
Gold Price Analysis: Closer To A Significant Monetary Event - 13th Dec 18
Where is the Stock Market Santa Claus Rally? - 12th Dec 18
Politics and Economics in Times of Crisis - 12th Dec 18
Owning Precious Metals in an IRA - 12th Dec 18
Ways to Improve the Value of Your Home - 12th Dec 18
Theresa May No Confidence Vote, Next Tory Leader Betting Market Analysis and Forecasts - 12th Dec 18
Gold & Global Financial Crisis Redux - 12th Dec 18
Wow Your Neighbours With the Best Christmas Projector Lights for Holidays 2018! - 12th Dec 18
Stock Market Topping Formation as Risks Rise Around the World - 11th Dec 18
The Amazing Story of Gold to Gold Stocks Ratios - 11th Dec 18
Stock Market Medium term Bullish, But Long Term Risk:Reward is Bearish - 11th Dec 18
Is a Deleveraging Event about to Unfold in the Stock Market? - 11th Dec 18
Making Money through Property Investment - 11th Dec 18
Brexit: What Will it Mean for Exchange Rates? - 11th Dec 18
United States Facing Climate Change Severe Water Stress - 10th Dec 18
Waiting for Gold Price to Erupt - 10th Dec 18
Stock Market Key Support Being Re-Tested - 10th Dec 18
May BrExit Deal Tory MP Votes Forecast, Betting Market Analysis - 10th Dec 18
Listen to What Gold is Telling You - 10th Dec 18
The Stock Market’s Long Term Outlook is Changing - 10th Dec 18
Palladium Shortages Expose Broken Futures Markets for Precious Metals - 9th Dec 18
Is an Inverted Yield Curve Bullish for Gold? - 9th Dec 18

Market Oracle FREE Newsletter

How You Could Make £2,850 Per Month

US Q2 GDP vs. TechnologyStocks Concerns vs. Foreign Markets

Stock-Markets / Stock Markets 2018 Jul 30, 2018 - 10:19 AM GMT

By: Chris_Vermeulen

Stock-Markets

This past week has been very interesting in the US markets for a couple of reasons.  It is time we took a hard look at what to expect going forward and ho in the US.  4.1% GDP for Q2 is massive compared to the previous administrations GDP levels.  Granted, these levels may not be sustainable in the long term above 4%, but we can only assume levels above 3% are going to last for a while unless something dramatic changes the economic footing within America.w this news will likely drive future market moves.

First, the Q2 GDP number came in as a huge boost to the US economy and for the future expectations of economic growth


Secondly, Facebook and Twitter both missed on earnings and growth numbers.  These two stocks got crushed in the process.  One thing to consider is that Facebook is within a transitional phase with the Federal government and the SEC investigating the company for illegal activity and for illegally allowing external firms to data-mine the user base.  These issues have likely resulted in a decrease in the total user base for Facebook and in a general dissatisfaction for existing users.  A certain group of people will simply stop using Facebook because they don’t agree with or condone these activities and don’t want to be a part of these issues.

Twitter, on the other hand, has had a rough go of it for years.  With a failure to properly monetize the company and users on top of recent concerns that “shadow banning” and “political bias” has infiltrated the SOP (standard operating procedures) of the company’s leadership, it appears Twitter is not being targeted as a “biased social platform” that could result in further headwinds for success.

The end result is that these two stocks don’t make up the entire stock market – they are just relatively large components of a much bigger market of stocks.

As we have been stating for months, the capital migration from foreign sources into the US markets have been a major driving force over the past 24 months.  This capital is searching for safe and equitable growth opportunities.  We are certain that a large portion of this capital found a home in Facebook and Twitter – as well as other stocks.  These investors may be shocked by the recent collapse of FB and TWTR, but we are relatively certain that these investors will likely continue to hold their positions for one reason – the expectations that the US economy is strong and the recovery of these two stocks will likely take place over the next 6 to 12+ months without much issue.

When we take a look at the longer term charts, we can see a fairly clear picture of the recent price rotation (January 2018) and the most recent upswing in prices.  This, our Custom US Index Weekly chart, shows exactly what we see in terms of trend and expectations.  The Std. Deviation channel is key to understanding future price rotation, if it happens.  As long as the lower Std. Dev channel is nor breached, price should find support and rotate higher as expectations continue to drive prices higher and as foreign capital continues to rush into the US markets.

This Weekly SPY chart shows a similar price channel setting up from 2016.  Actually, there are two price channels at play.  The Blue levels originate from the lows in 2009 and track price trends all the way through 2015~2016.  The upper Blue channel is currently creating support for prices moving forward.  The Green channels are more recent and originate from 2016.  Ideally, as long as price stays above the lower Green price channel, the trend is Bullish and we should expect mild price rotation.

Lastly, this NQ Weekly chart shows a bit more detail including our Time/Price cycles that indicate we should see some moderate price rotation over the next few weeks.  We don’t expect this rotation to be deep or excessively volatile, but we do expect some type of narrow price rotation to occur.  You can see from the arrows we’ve drawn on the chart that we expect prices to hover below or near 7400 for the next 3~5+ weeks – as we’ve been warning about for the past 30+ days.  The NQ will likely become range bound below 7400 for the next few months – possibly throughout the end of 2018.

The price channels shown on this chart, in Blue, are still critical to the longer term trends.  Once these channels are broken to the downside, then we would be more concerned of further and deeper downside price pressures.  As of right now, nothing is showing us any real concern and the Q2 GDP numbers will act as a booster rocket for the US economy unless something derails over the next 3~6 months.

The short sellers that have been setting up for a massive and deep price correction may see a bit of profits in some stocks that rotate lower, like FB and TWTR, but our analysis is showing these traders are taking a risky position getting setup for a deeper and broader market rotation downward.  At this point, with incredible GDP growth, strong earnings, a strong US economy and foreign capital rushing into the US market/stocks – we just don’t see the downside potential that others seem to see.

For months we have been posting our analysis stating the markets would push higher from the February lows.  We have stood by our analysis and weathered some criticism over the past few months.  Still, the markets continue to push higher and the news just seems to support our predictive modeling systems analysis.  Currently, a unique sector rotation is taking place that traders need to be aware of.  This will likely not become a broad market rally where everything goes up for weeks of months.  This will likely become a select sector rally in the markets based on expectations and opportunities. Last week to locked in 12% profit on the financial sector using FAS, and we feel its still headed higher!

If you want to learn more about our analysis and our opinions regarding what will move and when, then visit www.TheTechnicalTraders.com to learn how we can help you find greater profits in these markets.  Our predictive modeling systems have been calling these markets almost perfectly for the past 8+ months.  Isn’t it time you invested in your future success and take advantage of the features and benefits we can offer to you?

Become A Technical Trader Today and Profit! – CLICK HERE

Chris Vermeulen
www.TheTechnicalTraders.com

Chris Vermeulen has been involved in the markets since 1997 and is the founder of Technical Traders Ltd. He is an internationally recognized technical analyst, trader, and is the author of the book: 7 Steps to Win With Logic

Through years of research, trading and helping individual traders around the world. He learned that many traders have great trading ideas, but they lack one thing, they struggle to execute trades in a systematic way for consistent results. Chris helps educate traders with a three-hour video course that can change your trading results for the better.

His mission is to help his clients boost their trading performance while reducing market exposure and portfolio volatility.

He is a regular speaker on HoweStreet.com, and the FinancialSurvivorNetwork radio shows. Chris was also featured on the cover of AmalgaTrader Magazine, and contributes articles to several leading financial hubs like MarketOracle.co.uk

Disclaimer: Nothing in this report should be construed as a solicitation to buy or sell any securities mentioned. Technical Traders Ltd., its owners and the author of this report are not registered broker-dealers or financial advisors. Before investing in any securities, you should consult with your financial advisor and a registered broker-dealer. Never make an investment based solely on what you read in an online or printed report, including this report, especially if the investment involves a small, thinly-traded company that isn’t well known. Technical Traders Ltd. and the author of this report has been paid by Cardiff Energy Corp. In addition, the author owns shares of Cardiff Energy Corp. and would also benefit from volume and price appreciation of its stock. The information provided here within should not be construed as a financial analysis but rather as an advertisement. The author’s views and opinions regarding the companies featured in reports are his own views and are based on information that he has researched independently and has received, which the author assumes to be reliable. Technical Traders Ltd. and the author of this report do not guarantee the accuracy, completeness, or usefulness of any content of this report, nor its fitness for any particular purpose. Lastly, the author does not guarantee that any of the companies mentioned in the reports will perform as expected, and any comparisons made to other companies may not be valid or come into effect.

Chris Vermeulen Archive

© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules