4 reasons I think there's downward pressure ahead
Reason 1: What we saw Friday is a normal counter ralley Eventhough the primary moving avg trend is down (we had a moving average crossover between the 50-day and 200-day moving avg for the S&P500 and it's far from being undone). The counter ralley was further exacerbated by end of month mutual funds rebalancing their stock/bond portfolios for the month of January, since stocks plunged for the month. (After a counter ralley and a bear market direction, it's a chance for short-term investors to do some profit taking)
Reason 2: The news that brought on Friday's ralley was in part
BAD economic news US GDP underperformed expectations as did employment growth. The reason it forced a ralley was reduces the Fed's likekiness of hiking rates further. So once speculation is the FED is out of bullets, this will be bad fast.
Reason 3: Japan's negative interest rate decision indicates that most Feds, including ours, have run out of conventional options and once the last straw...negative interest rates fail, and we are in recession...it's going to be unprecedentedly bad
Reason 4: Debt to earnings in US companies is at a 12-year high
Thoughts?
Not to mention energy market is extremely volatile
Reason 1: What we saw Friday is a normal counter ralley Eventhough the primary moving avg trend is down (we had a moving average crossover between the 50-day and 200-day moving avg for the S&P500 and it's far from being undone). The counter ralley was further exacerbated by end of month mutual funds rebalancing their stock/bond portfolios for the month of January, since stocks plunged for the month. (After a counter ralley and a bear market direction, it's a chance for short-term investors to do some profit taking)
Reason 2: The news that brought on Friday's ralley was in part
BAD economic news US GDP underperformed expectations as did employment growth. The reason it forced a ralley was reduces the Fed's likekiness of hiking rates further. So once speculation is the FED is out of bullets, this will be bad fast.
Reason 3: Japan's negative interest rate decision indicates that most Feds, including ours, have run out of conventional options and once the last straw...negative interest rates fail, and we are in recession...it's going to be unprecedentedly bad
Reason 4: Debt to earnings in US companies is at a 12-year high
Thoughts?
Not to mention energy market is extremely volatile
Will stocks plunge next week?