Dow Jones futures fell sharply Sunday night, along with S&P 500 futures and Nasdaq futures, amid weak China trade. With the 2019 stock market rally rolling on to a key level, more top stocks have formed bases with proper buy points. Cisco stock, Workday stock, McDonald's stock, Xilinx stock and Bilibili stock have sound bases as of Friday's close.
The 2019 stock market rally showed more strength last week. A Thursday intraday pullback ended with modest gains while Friday's intraday retreat ended with fractional losses, just shaving big weekly gains. The Nasdaq composite is just below its 50-day moving average, with the Dow Jones and S&P 500 index not far behind. The 50-day line could act as resistance as bears try to stop bulls' advance.
A modest pullback over a few days would let the market take a break and allow more stocks to finish up bases or handles. The risk, of course, is that a pullback would put at risk the 2019 stock market rally.
Hi Tim
I will give you a well done pat on the back
You deserve it
But; As the resident bear on the forum it sure is lonely
Golly: I just can't see this continuing to new highs, which I assume all forum bulls expect IDK
The world slow down seems to be a real event, not just temporary, and I would think it has to affect all markets I also came across some information from people who should know a bit about china, which IMHO affects our market as well as most of the world, about the same as USA markets affect world markets. In their opinion china has been cooking the books a bit for public consumption. Mis-representing there GDP growth is the biggie.. As there is no way to actually know, if what they tell us is true, we can only make assumptions from bits and pieces here and there. Not a very good way to dig into china, I know.
However, some argue that china real GDP in the last yr was closer to zero than 6 % growth. Now both you and I know china would never say that publicly. If they say GDP is 6 % then that is it. End of story. But did they not have a top economist re-sign over differences with the ruling politburo?? Maybe nothing, maybe something. Who knows?? At least he is not in jail the last I heard but I don't really know. My thoughts are the trade war is actually causing china problems. And how can china continue to sell more goods to a world that is slowing down. Is the market for Chinese factory goods saturated??
Another indication from china was the number of cars sold last yr. Perhaps the number sold is a price factor as they add a very high state tax to the price of a car. At least when I visited china [unless things have changed since I was there] their was a waiting list of people wanting to buy cars and were willing to pay about the equal of 10,000 USD tax on top of the retail price. China could only allow so many cars sold/yr. due to lack of infrastructure for cars, mostly in the larger cities. Now if car sales have dropped because of lack of demand that, I think, is a good indication that china's economy is not all that they tell us. We also know that Apple did not sell as many iPhone in china. Why are some Chinese people not buying stuff. Their housing market is suspect as to value, which is the biggest wealth indicator for the average Chinese citizen. A few yrs ago, an apartment bought by an individual was about the only source of wealth increase. They could not start a business as one has to remember, all things are controlled by central planning and you don't just open up a retail shop on any old street. The closest you can do is what they call mosquitoes. That is small stalls on the side walk selling trinkets to tourists. They get in your face trying to sell, thus the nick name mosquitoes. We also know that some zombie factories are being shut down. We don't hear about many re-placement factories but maybe I am not so well informed. I have not even touched on china's financial problems.
. If you look at a map of where china trades it goes all the way from china's east coast, thru Russia, Pakistan, India and all of the southern Indonesia countries, plus assorted other countries thru the ME especially Iran and all the way to the water of the U.K channel including all of Germany France, Spain actually most of the entire EU and actually, some into the U.K. It's called the silk road and golly it covers a lot of territory. If all of that is slowing down, that is a huge chunk of the world economy.
To make things worse, I haven't even mentioned the sad state of world finance and 8 yrs of countries, [call it what you want] printing fiat money out of thin air. I don't have the numbers for world debt but it is really huge. Printing money is actually creating debt. That will most likely result in a huge hang over the likes of any day after hang over. There is a lot more world risk but I will stop here.
I know, I don't want to sound like a party pooper, but I think the risk is real and dangerous. We have seen the Dow drop big time. What happens if people panic and the Dow drops even more than last time. Then the sellers pile on. Then some bank reports a huge problem with loan defaults or what ever can spook a market??
I think the odds favour such a thing now more so than some yrs ago when the world economy was on steroids.
On a more positive note our investment portfolio is looking much better