Breaking News
0

Markets Moved Higher, But We Can Expect A Pull Back

By Bill PoulosMarket OverviewFeb 01, 2019 05:47PM ET
www.investing.com/analysis/the-weather-may-be-cold-but-these-candles-are-hot-200382848
Markets Moved Higher, But We Can Expect A Pull Back
By Bill Poulos   |  Feb 01, 2019 05:47PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

This past week we have had two major news announcements here in the U.S. The first was the release of the FOMC statement and press conference on Wednesday. This is where the Federal Open Market Committee determines the best route for financial growth in our economy. It will look specifically at what the fed funds rate should be to best serve the stability and continue the progress of the economy. In this meeting it was determined that no changes to the current rate should happen. Then on Friday, the Nonfarm Employment numbers were released. This tells us the change in the number of employed workers for the prior month (not including farming). The number was expected to come in around 165,000 but exceeded that and came in around 304,000. On the other hand, the unemployment rate which was expected to stay at 3.9% came in at 4.0%. It is important to be aware of these types of reports as they can cause the market to increase in volatility.

In closing out the month of January, we saw the markets recover a large majority of what they lost in the month of December. In fact, the DJ-30 dropped 2,425.11 points in the month of December only to move up by 1,941.06 points in the month of January. These movements were similar as we looked at the S&P 500 and the NASDAQ.

Now as we move into the month of February, we will see if the markets continue to be volatile or if we can finally put the end of year trading behind us and begin trading in a more deliberate fashion. In either case, make sure you are using the proper position size for the trades you are taking.

Let’s take a look at how the markets performed this last week.

DJ-30

DJ-30
DJ-30

On the weekly chart of the DJ-30, you can see we had our sixth week the up candle as the price is testing and maybe even trying to break above the downward resistance line. In addition, you can see that the price is trying to move above the 50-period simple moving average. Both of these things point to a very strong and bullish market right now. A continued move above these areas could lead to the prices trying to move back up to the highs once again. Because we only trade what we are seeing on the charts, we need to make sure the price action is confirming what we are thinking might happen. We also need to be cautious in this current area as the price could be pushed down if the resistance areas begin to push prices lower.

SP-500

S&P 500
S&P 500

On the weekly chart of the SP-500, you can see a similar pattern to what we saw on the DJ-30. With price still sitting near the resistance areas on the chart, we could see the bears try to push prices back down. Also notice that the price has not yet broken above the 50-period simple moving average. Until this happens, we need to watch for a price reversal that could push prices back down once again.

NASDAQ


While we are also seeing a similar pattern on the NASDAQ as we saw on the other two, this chart continues to show the price staying above down trending resistance line. It also has yet to break above the 50-period simple moving average on the weekly chart, although the moving average line is now moving higher.

While this next week doesn’t have as many significant news events, we are still in a time where even small news can have a big impact on market direction. While it is nice to see such a strong move higher, we can expect to see prices pull back at some point, even if only temporarily.

Markets Moved Higher, But We Can Expect A Pull Back
 
Markets Moved Higher, But We Can Expect A Pull Back

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Stocks, futures, forex, bonds, cryptocurrency, commodities, and indices have potential rewards, but they also have large potential risks. You must be educated on and aware of the risks of investing. You must be willing to accept the risks in order to invest in any of these. DO NOT trade with any money that you cannot afford to lose. Bill Poulos and Profits Run, Inc. are not liable for your investment losses. The following disclaimer holds true for content published by Bill Poulos on investing.com: https://www.profitsrun.com/earnings-and-income-disclaimer/
Continue with Google
or
Sign up with Email