Stock Market Analysis

Wednesday, September 20, 2017

US Market On a Rocket!

So far this week, I have been wrong on my profit taking prediction for the week as the US market continues to make new historical highs every single day. Well, this is the kind of mistakes that I don't mind making as not only am I looking at my existing positions going higher, me and my Master's Stock Options Picks subscribers also took the opportunity to accumulate into call options on stocks that have not quite participated in this rally so far.

Yes, the US market truly is on a rocket right now with the Dow making its 8th straight positive day yesterday! The S&P500 also made a new historical high close yesterday despite going deeper into short term overbought territory. Interestingly, the Nasdaq doesn't seem to be participating in this rally that enthusiastically so far. In fact, no new highs have been made this week. Since the Nasdaq tends to lead the Dow and the S&P500, does that show that the profit taking I predicted is still very real?

Well, from the recent short term overbought signals triggered by the S&P500, the 8 straight bullish days by the Dow and the non participation from the Nasdaq composite as well as confirmation from a sudden drop in total equities put call ratio in favor of call options trading (yes, a sudden drop is always an opposite suggestion), I would say the profit taking is still very real and may start as early as today. However, I do expect this to be a fairly mild profit taking, probably just a couple of days to wear off the short term overbought condition before the market continues its rocket to the moon.

Yes, I continue to think that this is a primary bull trend that has at least another year to go as long as Trump remains in office and nothing changes.

Today is also FOMC announcement day.

However, since the feds are not expected to do anything with the rates today, I don't foresee any significant impact on the stock market apart from the usual uncertain trading behavior in the morning and perhaps for the rest of the day as well.

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For now, the market remains in all out bull trend.

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