Here’s everything you need to know before the stock market opens on Monday. As promised, this free weekly newsletter will be sent out every Monday morning (or Sunday night, depending upon where you live) so that you can get prepared for the stock market open, including:
- A Recap of Last Week
- The Current Market Sentiment
- Technical Analysis and Stock Market Prediction
- Upcoming Economic News This Week
- Upcoming Earnings This Week
Last Week Recap
Despite the sell-off on Friday, the market indices all finished the week in the green, continuing the bullish run we’ve seen since the start of 2023. Even in the face of quite a bit of news that would normally have sent the stock market crashing, the stock market continued it’s run higher. On Wednesday, the Federal Reserve announce an expected 0.25% rate hike. Jerome Powell then made it very clear that the Fed will not lower interest rates in 2023. The market ignored him though, and continues to price in 2 rate cuts before the end of this year. The major earnings that came out on Thursday from Apple, Amazon, and Alphabet were extremely disappointing, with all 3 companies missing earnings and providing weak forward guidance. Despite that, stocks barely fell and Apple actually rose on Friday. And the jobs number on Friday was shockingly high, which normally would have sent the stock market crashing in fear of the Fed raising rates higher than expected. But the stock market generally ignored the strong jobs data, and failed to fall significantly when the data was released.
Market sentiment remains extremely bullish with the CNN Fear & Greed Index at “Extreme Greed” (https://www.cnn.com/markets/fear-and-greed). The market is ignoring every piece of bad data, including everything the Fed says and earnings declining. There doesn’t appear to be any bad news that could cause the stock market to drop. Fundamentally the economy and company earnings are in a much worse place than they were when the market bottomed out in October last year. The stock market will eventually get in line with the fundamentals, but when is uncertain.
The daily chart remains bullish, although the RSI did hit overbought on Thursday. The RSI fell back below overbought on Friday though. There is also a small gap to fill on the daily chart, indicating another day of downward pressure on the horizon.
But the weekly chart is extremely bullish with a W shaped pattern having formed. The weekly RSI is also back above 50, which is bullish as well. The NASDAQ has support around 7% above where it closed on Friday at the 50% Fibonacci Retracement level. This indicates another 3 to 4 weeks of bullishness, but does not guarantee that every week in the next 3 to 4 weeks will be green. Don’t forget that the stock market zig-zags both on the way up and the way down.
The most important economic events this week include trade data coming out Tuesday, as well as Jerome Powell speaking at the Economic Club of Washington, D.C. On Wednesday, New York Fed President John Williams will be interviewed at the CFO Network Summit. Then on Friday, the preliminary reading of US consumer sentiment for February is being released.
Here’s all of the economic news coming out this week as well as the time each report is being released: https://www.marketwatch.com/economy-politics/calendar
Here’s what time each Fed member is speaking this week: https://www.federalreserve.gov/newsevents/calendar.htm
Although the largest companies have already reported, we still have quite a few important earnings coming out this week.
Other Things to Know
A full discussion of this week’s market movers is covered in the video I uploaded Sunday night (https://www.youtube.com/watch?v=QTVWD9psnIs). If you’re looking for a broker to trade with, both Moomoo and Webull continue to offer a large amount of free stocks when you use my link to sign up and make a deposit of $100 or more. You can get your free stocks at https://weprofit.io/platforms/. And if you haven’t already signed up for my free giveaways, you can do so by clicking the purple button at the bottom of https://weprofit.io/.
Wishing you the best of success trading this week,