Market At New All-time High – FB and MSFT After the Closing Bell
Posted by Pete Stolcers on April 24
Yesterday the market jumped to a new all-time high in the first hour of trading. Solid earnings fueled the move and the momentum stalled for the rest of the day. Traders will lean on the remaining announcements this week.
The overnight earnings were good and the S&P 500 is flat before the open. Texas Instruments said that the soft patch in semi-conductors might last two more quarters and that will weigh on tech stocks. Facebook and Microsoft will report after the close today.
Good news is priced in and stocks are trading at the upper end of their valuation range. Shorts typically wait until all of the mega cap tech stocks have reported. I’m expecting the upward impetus to continue through next week.
Trade talks with China continue and a deal is expected in May. China’s economy has upticked and traders are pinning hopes on recent data. The PBOC is holding off on additional easing and analysts are viewing that as a positive sign. The growth in China is critical since Europe and Japan are weak.
Domestic releases have been strong, but slightly below estimates.
The Fed will meet next week and the comments have been extremely dovish. Some officials even feel that a rate cut might be warranted if disinflation surfaces.
The macro backdrop is firming up. Auto tariffs could be imposed in the middle of May by Trump and that is the next potential speedbump.
Swing traders exited the half position of SPY yesterday when the index crossed $293. We will remain on the sidelines and we will evaluate earnings reactions and guidance.
Day traders should look for opportunities to get long. Buy early dips. Intraday trading ranges have been extremely compressed once the initial move has run its course. Try to make your money early and reduce your trade count after two hours. I will be trading post earnings releases using Option Stalker and we will zero in on relative strength and buy signals from the system.
The focus is on earnings and the market should be able to grind higher. Resistance at the all-time high will be fairly stiff and I’m looking for a gradual grind higher, not an explosive rally.
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