Monday: Expect Stock Market To Rise

Stock Markets will likely rise on Monday due to last week’s positive momentum moving forward this week

US stock markets will likely rise for Monday, as investors seem poised to keep the bulls running hard after last week’s volatility. The S&P 500 (SPY) added .65% on Friday to close at 1744.50 (which is a new record), while the Dow Jones Industrial Average (DIA) added .18% to close at 15,399.65 and the NASDAQ Composite (QQQ) added 1.32% to close at 3914.28.

Last week was a tough one as I only called one correct day out of five trading days. Investors appeared so certain that a US default was off the table, contrary to my belief that the US can default under certain political circumstances. Naturally, I understood the “no default” relief rally on Thursday and Friday, despite the fact that we will be facing this problem again in February.

So for Monday, October 21st, I am predicting a stock market rise, due to the fact that the bulls are still in control and that investor sentiment appears to be fueled by greed and the need to see just how high markets can go.

From a technical perspective, the S&P 500 (SPY) has a very robust MACD at 5.516 and a rising RSI at 65.89. The index is showing no signs of slowing down anytime soon, although my first red alert will come when the RSI rises above the 70.0 threshold, indicating an overbought situation. So with momentum on the bulls side, I say let the bulls run for Monday:

International markets are already trading in the green at the time of this writing, with the Nikkei Index (FXY) trading into solid 1% gains and the Hang Seng Index (EWH) adding half a percent. European markets finished last week well into the green, with the FTSE 100 (EWU ), DAX (EWG) and CAC 40 (EWQ) all clearing over half a percent. All of these performances bode well for the Bulls on Monday.

US futures markets are also trading green at the time of this writing, suggesting more positive investor sentiment for Monday.

The VIX Index (VXX) or fear indicator lost a whopping 3.26% on Friday and a total of 17.05% all last week. Fear does not appear to be in style at the moment (clearly), which bodes well for the bulls.

US Treasury Bond prices are perhaps the only divergence from a positive day on Monday, with the 30 Year US Treasury Bond Index (TLT) rising .33% on Friday. Although this move may suggest lower prices for equity markets in the near future, such a small move for US Treasuries should to have that large of an impact on Monday.

Gold (GLD) prices are currently down .28% compared to a .17% increase for oil prices (USO) last week. I would call these results a wash at the moment for influencing Monday’s stock market performance.

Monday also brings us a heavy week of earnings reports from Wall Street favorites Netflix (NFLX), McDonalds (MCD), Texas Instruments (TXN), and Amazon (AMZN). The general projected consensus for this week’s earnings reports appears positive, or at least accepting of the fact that the US economy continues to bump along at an anemic rate. We are also due out for an Existing Home Sales Report, which is forecast to be negative.

And, for our fun fact of the day: Singapore Airlines currently runs the longest flight in the world, which connects Singapore and Newark, New Jersey with a 19 hour flight. According to CNN.com, the airline plans to drop the longest route in the world this year, due to lack of demand. I guess not many people want to chill out on a plane for 19 hours, surprise surprise.

Bottom line: I predict a stock market rise for Monday, due to current bullish momentum. Is another record in sight for the S&P 500 (SPY)?

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