Stock Market Analysis

Monday, September 25, 2017

US Market Outlook Week 5 September

Welcome to another brand new week in the US market!

Lets review what I said last Monday and what actually happened last week in the market. I expected last week to be a "bullish inclined profit taking week" and by the end of the week, the Nasdaq composite closed the week negative while both the Dow and the S&P500 both closed marginally positive. However, if you look at the daily chart, both the Dow and the S&P500 were also mostly negative last Thursday and Friday. In a way, that's a bullish inclined profit taking but just a tad softer than I would like to have seen.

With this profit taking still too soft to achieve what its supposed to, which is to set up better prices for a new leg upwards, I would think this week continues to be one which is largely uncertain and under profit taking pressure. A look at the bond yields and the total equities put call ratio both shows the kind of uncertainty that supports my outlook.

This week, the US market welcomes the third estimate for second quarter GDP on Thursday. Consensus is expecting a slightly stronger estimate than the last one, Going by the recent trend, beating consensus should not be a problem. However, this isn't a number that usually moves the market significantly like how the ISM index and the Jobs Report can unless an unexpectedly big surprise hits the number, something which is not a high probability event.

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For now, the US Market remains in all out bull trend.

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