The market (NYSEARCA:NYSEARCA:SPY) has traded sideways for a week or so. I've been saying it's important to respect direction as a guide for trading. So sideways isn't a great guide. Still I think there's three fundamental reasons building that can potentially drive the next move lower.
In this video I'll tell you what I'm watching and what I need to happen. I'll also talk about how to confirm a follow through.
First Reason For Stock Market Break: Taper
The first reason has to do with a big Fed taper. Even though these numbers are still huge, there's still a taper going on.
They went from $60B a day in buying a few weeks ago to now to now $6B-7B a day. That's way down. These are huge numbers still but way down. I think that has the risk to soften up the market on any bad news.
Second Reason For Stock Market Break: Fundamentals
Non-farm payrolls are below. They report tomorrow.
Fed officials have been warning us all week for a key non-farm payroll number reported tomorrow. In tandem with the Fed taper, there's a chance stocks can actually trade weak on bad news.
Third Reason For Stock Market Break: Trump
President Trump said he plans to retaliate against China for allegedly purposely releasing the coronavirus. That has not hit the market because there's been no official move, just threats. But when we get something more official I think there's a good chance for a break.
Technicals have looked fine but fundamental factors have been building potentially to give this market a breakdown below this sideways trend. In this video I'll let you know what simple key indicators I'd be watching.
#1 Tech Stock Pick Service On SA. Consistent Correct Market Calls
Subscribers are saying;
"almost always correct in timing calls"
"increased profits greatly"
"pro with a great hit rate."
"paid for itself many times over."
Steady returns in all markets (bull and bear). No big drawdowns. Work side-by-side with a hedge fund pro with 20+ years experience to help you identify big stories and catch big stock and market moves.