May 1, 2019
Posted 9:30 AM ET - The market is in a very tight upward sloping channel. Earnings season is at its peak and the results have generally been good. Apple posted better-than-expected results and it was the last of the mega cap tech stocks to report. The market will need leadership from other sectors to move higher. Global economic growth numbers were mixed. China missed expectations by a small margin and their PMI stayed above 50. Europe’s Q1 GDP came in slightly better-than-feared and growth rose .4% versus .2% expected. Those results are still dismal. Tomorrow Europe will post its manufacturing PMI. Domestic economic growth has been strong and last week's GDP number (3.2% growth in Q1) set a positive backdrop. This morning ADP reported that 275,000 jobs were created in the private sector during the month of April. That is a huge beat and it bodes well for Friday's Unemployment Report. ISM manufacturing will be released 30 minutes after the open. The economic news will be pretty steady the rest of the week. The FOMC will release its statement this afternoon. We can expect dovish comments. Trade negotiations between China and the US are progressing and many analysts believe that a trade deal will be reached in the next few weeks. Swing traders are in cash. Place an order to buy the SPY at $293. Economic growth in China seems to have stabilized and Apple posted a good number. We will not chase, but we will buy a dip. Day traders should wait for the bid to be tested. Once support is established buy stocks with relative strength. I believe the action will be very light after the first two hours of trading. Most European markets are closed for holiday and traders will be waiting for the FOMC statement. Trim your trade count and size after the first few hours of trading. Yesterday the market dropped after Google reported soft results. That dip immediately reversed and the market shot higher. The bid is still very strong and the market will continue to drift higher in a tight trading channel. . .
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