Market Update

After a minor pullback on Tuesday, the averages rebounded yesterday with the help of solid earnings from retailers LOW and TGT, which shows that the U.S. Consumer is for now, the main pillar of support for the U.S. Economy. The markets also got a boost from the President, who apparently is willing to Cut Payroll Taxes and or Capital Gain Taxes, to help the U.S. Economy and Equity Markets if needed, but since the U.S. Economy is still strong and the averages just below their highs, no additional help is warranted for now. Anyway, yesterday rally was broad based with winning issues topping losing ones by a wide 2/1 margin, but the Volume was Summer light with just 670 million shares trading.

Overall, yesterday’s trading followed the markets recent pattern with the averages opening up big, then trading sideways for the rest of the day and after hitting the day’s highs of DOW 26,270, S&P 2928 and 8040 on the NASDAQ by 10:00 am, then Market Players took a step back and waited to hear the July FOMC Minutes at 2:00 pm. The July Minutes showed that the FOMC was divided on Cutting Rates in July and warned that any future Rate Cuts, would NOT be pre-determined, meaning that a Rate Cuts for the rest of 2019 are NOT a sure thing. The averages closed out the day quietly and it looks like Jerome Powell’s speech at the Jackson Hole Summit on Friday at 10:00 am, will now be a big factor in determining how this week closes out.

Technically, the averages are now back in overbought territory and their Stochastics are all forming Negative “M” topping patterns, but there is room for the averages to make a run at breaking through Resistance at DOW 26,300-26,400 S&P 2935-2945 and 8050-8100 before rolling over. So in the meantime, keep trading and keep looking for bargains in the markets lagging issues and never chase prices higher.

Overnight the Global markets were mixed and in early trading our markets are trading slightly lower. The 2 Yr/10 Yr Yield Spread has narrowed to just 2 basis points, which just last week, sent all the markets tumbling, while this week no one seems to care. Anyway, the Dollar is ticking higher on weak Economic data out of Japan and Europe and Commodities are mixed with Oil recouping the $56.0 level and Gold trading down to $1506.

Today we have the Weekly Jobless Claims at 8:30 followed by the July Leading Economic Indicators at 10:00 am, but with everyone now fixated on tomorrow’s speech by the Fed Chair, none of this will matter.