US Swing-Trading Environment further improved
The stock market rally hit some turbulence Friday as weak earnings from Snap (SNAP), Seagate Technology (STX) and Intuitive Surgical (ISRG) weighed on sentiment but overall it was a good week at WallStreet last week.
There are good reasons to be optimistic about a tradable rally, but several high-profile earnings reports next week will likely dictate the action, including results from the remaining four FAANG stocks: Google parent Alphabet (GOOGL), Amazon.com (AMZN), Apple (AAPL) and Meta Platforms (META).
And don't forget about the two-day Federal Reserve meeting where the Fed on Wednesday is widely expected to raise its key lending rate by another 75 basis points to a range of 2.25% to 2.5%. Another rate hike is expected in September, although the chances for another 75-point hike have faded as the bond market weighs the possibility of a soft landing for the U.S. economy.
Caution is still advised!!!
Our risk model for the US stock market further improved last week:
Most of the technical indicators in our risk model are now showing a green light:
New 52w Highs / Lows
Stocks above / below 200d MA
Volatility Index VIX
Up / Down Volume
Advance-Decline Line
Also, the psychological indicators bulls vs bear and margin debt are favourable and would support a new bull market rally.
What does that mean for swing traders?
By now, swing-traders should have opened the first positions and be invested by 30-60%. Market exposure can be increased in case the stocks in your own portfolio show sustainable traction. Apply progressive exposure in your trading and always think risk first!
There are good reasons to be optimistic about a tradable rally, but several high-profile earnings reports next week will likely dictate the action, including results from the remaining four FAANG stocks: Google parent Alphabet (GOOGL), Amazon.com (AMZN), Apple (AAPL) and Meta Platforms (META).
And don't forget about the two-day Federal Reserve meeting where the Fed on Wednesday is widely expected to raise its key lending rate by another 75 basis points to a range of 2.25% to 2.5%. Another rate hike is expected in September, although the chances for another 75-point hike have faded as the bond market weighs the possibility of a soft landing for the U.S. economy.
Caution is still advised!!!
Our risk model for the US stock market further improved last week:
Most of the technical indicators in our risk model are now showing a green light:
New 52w Highs / Lows
Stocks above / below 200d MA
Volatility Index VIX
Up / Down Volume
Advance-Decline Line
Also, the psychological indicators bulls vs bear and margin debt are favourable and would support a new bull market rally.
What does that mean for swing traders?
By now, swing-traders should have opened the first positions and be invested by 30-60%. Market exposure can be increased in case the stocks in your own portfolio show sustainable traction. Apply progressive exposure in your trading and always think risk first!
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