Put two traders in a room, and one might scream to sell while the other puts in orders to buy. So who’s right? Well, they both could be—depending on the indicators they’re looking at and the kind of trading you want to do.
We’ve rounded up our InvestorPlace advisors to give you their read of the market.
John Jagerson and Wade Hansen, Slingshot Trader
If interest-rate expectations continue to rise, and the economic numbers we see reported each month don’t continue to improve along with those expectations, the bullishness that has pervaded the U.S. stock market is going to dissipate.
We’ll get a better idea of what the Fed has in store for the markets when the Federal Open Market Committee (FOMC) meets next week (June 18-19), but until then, watch for the market to proceed with caution.
Jon Markman, Trader’s Advantage and CounterPoint Options
We have been through this so many times, haven’t we? Stocks have come right into support and rallied. One day that won’t happen — but it’s nice for now that they did.
This is the moment of truth now for bears. To show that they mean business, they need to repel the advance immediately. If not, they will be overrun as buyers squeeze short-sellers who thought that they had the battle in hand.
These are exciting times — and should present lots of profit opportunities for nimble traders. If a real rally is ignited, it could catch fire and burn a lot higher, a lot faster, than most people expect.
Ken Trester, Maximum Options
Our indicators are giving bullish to neutral readings, unchanged from last week. However, the bullishness of those readings has an uneasy feel about it, as the major indexes continue to hover around their 50-day moving averages. Those averages have held as support twice over the past week, so a break below them could cause a cascade of selling. For the support to hold, the Dow must stay above 14.970, the S&P 500 above 1610, and the Nasdaq above 3380.
John Lansing, Parabolic Options, Trending123 and Power Trading at the Open
Here’s the long and short of it. The reason why the rollover in stocks has been so severe is that we’re in a very strong sell signal. Take the U.S. dollar for example. The dollar topped in the middle of May, which goes with the saying “Sell in May and Go Away.” That’s where the overall market topped as well–they’re trading in lock-step. I am anticipating a bear flag still.
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