Commentary is shared for informational and educational purposes only. Follow the Money is a financial education company. We teach the art of technical trading. What you should trade and when you should trade depends upon you, your research, and your risk profile. We are not stockbrokers. We are real traders and investors like you. As such, we make no guarantees. You should always consult a qualified financial advisor before seeking access to the financial markets.
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Market Trakker Commentary/Update - June 9. 2019
by Jerry Robinson
The S&P 500 index remains in a Position uptrend. However, the uptrend has weakened in recent weeks though continues to be supported by a Long-Term uptrend.
The S&P 500 surged 4.5% last week on hopes of the first interest rate cut in a decade. The S&P 500 roared back this week enjoying its best weekly gains this year after the Federal Reserve launched a concerted and coordinated effort to boost asset values by once again shifting their stance towards current interest rate policy. Last year, Federal Reserve Chairman Jerome Powell told investors to expect a string of interest rate hikes in 2019 due to a “strong” U.S. economy. By December, as the stock market suffered its steepest selloff in a decade, Mr. Powell suddenly changed his tune and announced that the Fed would “pause” its planned interest rate hikes in 2019. Six months later, the Fed’s policy pause has now shifted to a full-blown policy reversal as Mr. Powell assuaged investors earlier this week with promises to “act as appropriate to sustain the (economic) expansion.” (Translation: The Fed is planning to slash interest rates, possibly as soon as this month’s policy meeting scheduled for June 18,19 — and likely no later than its July meeting.)
Ironically, Mr. Powell downplayed any potential chance of an interest rate cut just last month. As I have often pointed out, the primary driver of Fed policy is not economic data (as is often suggested) but asset prices. Therefore, if you want to know what the Fed is thinking at any given time, it is more instructive to monitor the S&P 500 index and longer-term bond yields than to focus on actual economic data.
Turning to the charts, the price action was all bullish on moderately high volume. The S&P 500 index managed to retake its all-important 200 DMA early in the week and closed above its 50 DMA on Friday. While the price action has been topsy-turvy over the past few weeks, traders are turning bullish here as the futures markets suggest a 20% chance for an interest rate cut in June and a 70% chance by July.
I closed out my short-term “short” positions for a 20% and 37% gain early last week. Platinum members have access to my latest trading activity, including real-time trading alerts, here.
Our Market Trakker alert system will keep you advised of the current broad U.S. stock market trend. Smart traders may take the opportunity now to research their favorite stocks and ETFs so that they can take advantage of the inevitable price moves!
Disclaimer: Commentary is shared for informational and educational purposes only. Follow the Money is a financial education company. We teach the art of technical trading. What you should trade and when you should trade depends upon you, your research, and your risk profile. We are not stockbrokers. We are real traders and investors like you. As such, we make no guarantees. You should always consult a qualified financial advisor before seeking access to the financial markets.
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