S&P 500 ETF SPY

S&P 500 All Time Highs?

SPY ETF all time highs
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The S&P 500 ETF (NYSEARCA:SPY) matched the second highest close in its history. The “SPY” is less a percent away from it’s highest close. That next highest close looks like the next stop.

After the market passes its all-time high it probably has running room for a while.

The market has eaten up trade war news. According to some reports the next package of harsh trade news may not come until late Fall. That’s when the current set of $200B in tariffs may not be able to take effect until.

So we have high growth, GDP at 4+%, low inflation, the latest PCE price was .1% and a market inches from new highs.

Low rates, low inflation and high growth approaching on new highs is a reason for the market to break those highs and keep going.

Looking For Earnings Home Runs

We spoke to the top tech companies over the last few months to identify what tech stocks have home run earnings potential. Earnings are what drives stocks, especially tech stocks. Finding those few tech stocks that have realistic earnings trajectories way above the Street can give you conviction to see a stock through to big upside. Dip your toe in the water with a free trial.

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All investments have many risks and can lose principal in the short and long term. The information provided is for information purposes only and can be wrong. By reading this you agree, understand and accept that you take upon yourself all responsibility for all of your investment decisions and to do your own work and hold Elazar Advisors, LLC, and their related parties harmless.

We have no holdings in the stocks mentioned unless otherwise noted.

Stock Market Holding Up Like A Champ

The stock market is up slightly as we write this despite trade war concerns and a US brush with Iran.

What’s going on?

When you’d expect down and get up that’s called “bad news good action.” It’s a trading signal that bodes well for the stock market.

This market has weathered a lot.

For the S&P 500 ETF (NYSEARCA:SPY) 280 looks like a critical support-resistance level. A decisive close above or below is a key hint to follow through in that direction.

The way the market is swallowing up all negative news and holding up anyway looks very bullish. That’s what a bull is. It licks up everything in its path. That’s why they call the stock market a bull. Not much can stop it.

Earnings Likely The Driver

We are hardly in earnings season but we’d guess that strong earnings reports to come and strong guides are what investors are holding on for despite the negative macro news.

We’re bullish on our coverage and think tech earnings reports, many of which are soon to report can support this market.

Earnings start in earnest tonight and this week.

Hitting Tech Stock Earnings Home Runs

We spoke to the top tech companies over the last few months to identify what tech stocks have home run earnings potential. Earnings are what drives stocks, especially tech stocks. Finding those few tech stocks that have realistic earnings trajectories way above the Street can give you conviction to see a stock through to big upside. Dip your toe in the water with a free trial.

We’re about to hit our prime time, earnings season.

START FREE TRIAL

Read Reviews

All investments have many risks and can lose principal in the short and long term. The information provided is for information purposes only and can be wrong. By reading this you agree, understand and accept that you take upon yourself all responsibility for all of your investment decisions and to do your own work and hold Elazar Advisors, LLC, and their related parties harmless.

We have no holdings in the stocks mentioned unless otherwise noted.

Who’s Winning The Trade War In One Chart

S&P 500 ETF SPY versus the Hang Seng HSI
Source

Trade war news started escalating in June. You want to know who’s winning the trade war? Click the chart on the left. You’ll see the US’ S&P 500 ETF SPY (NYSEARCA:SPY) versus Hong Kong’s Hang Seng Index (INDEXHANGSENG:HSI).

Many companies based in China trade on The Hang Seng Index.

Since June you can see the huge divergence between U.S. shares and Hong Kong listed shares.

Investors are worried about the outcome for their China-related investments much more than they are their U.S.-related investments.

China Showing A Weak Hand Already

In reaction to some trade concerns China has been letting their debt grow again which is something they were trying to control. Not wanting their economy to slow much they are allowing debt to build.

China has also been letting its currency slip of late. That’s a sign of concern. Past drops of their currency have led to capital outflow from residents further pressuring their currency.

Lower currency may make exports cheaper but too big of a drop can cause regional currency destabilization and contagion risk.

These are some of the many reasons that the high-level charts on the two indices, U.S. and China have diverged. Investors are showing who they think has the strong hand and who has the weak hand.

Hitting Tech Stock Earnings Home Runs

We spoke to the top tech companies over the last few months to identify what tech stocks have home run earnings potential. Earnings are what drives stocks, especially tech stocks. Finding those few tech stocks that have realistic earnings trajectories way above the Street can give you conviction to see a stock through to big upside. Dip your toe in the water with a free trial.

We’re about to hit our prime time, earnings season.

START FREE TRIAL

Read Reviews

All investments have many risks and can lose principal in the short and long term. The information provided is for information purposes only and can be wrong. By reading this you agree, understand and accept that you take upon yourself all responsibility for all of your investment decisions and to do your own work and hold Elazar Advisors, LLC, and their related parties harmless.

We have no holdings in the stocks mentioned unless otherwise noted.

Earnings Led Stock Market Breakout This Week?

S&P 500 SPY ETF
Source

The stock market (NYSEARCA:SPY) is approaching a key level at 280. A close above it would be a breakout signaling the market can move higher.

So far the stock market has looked through trade concerns and Fed rate hikes and we’re about to enter earnings season.

Now that we’re moving into earnings season the fundamentals should matter more than the macro.

Earnings matter for stocks. Starting this week earnings reports and guidance are the stock market’s next cue.

Bullish For Tech Stocks For Q2

We’re bullish about tech stocks for Q2 and, maybe more importantly Q3 guidance.  If correct that may have been the reason for the stock market’s strength despite negative “macro” news.

So far our work says that Q3 business has not been affected yet by trade concerns. If that shows through in strong guidance we should continue to higher highs for the stock market.

Hitting Tech Stock Earnings Home Runs

We spoke to the top tech companies over the last few months to identify what tech stocks have home run earnings potential. Earnings are what drives stocks, especially tech stocks. Finding those few tech stocks that have realistic earnings trajectories way above the Street can give you conviction to see a stock through to big upside. Dip your toe in the water with a free trial.

We’re about to hit our prime time, earnings season.

START FREE TRIAL

Read Reviews

All investments have many risks and can lose principal in the short and long term. The information provided is for information purposes only and can be wrong. By reading this you agree, understand and accept that you take upon yourself all responsibility for all of your investment decisions and to do your own work and hold Elazar Advisors, LLC, and their related parties harmless.

We have no holdings in the stocks mentioned unless otherwise noted.

Stock Market’s Next Move: Breakout?

Source

The stock market’s had some volatility this year. But we might be just about through the rough part.

The chart to the left is the S&P 500 ETF SPY (NYSEARCA:SPY) and shows that since the low February 9th we’ve made higher lows. That’s a bullish sign.

We’re also only 1% away now from refilling the entire gap before the drop on February 2nd. In trader terms that’s called the market’s done a lot of work.

The market looks like it wants to go higher.

The Next Move

As we shrink those swings making higher lows approaching the flat line we drew in the chart the dips could get smaller and smaller. You see from the trend we have a good shot at going topside of that horizontal resistance line at about 280. That’s a small move away for this market.

A close above it and investors would quickly swivel looking to more all-time highs once again.

The Stock Market’s Done A Lot Of Work

Besides building back recovering all those losses made in early February the stock market has looked through more rate hikes and plenty of trade concerns.  That’s a lot of negative news to rebound from.

Looking through all that negativity shows you how bullish this market really can be.

What’s Driving This Strength

In a word, earnings are driving the stock market’s underlying strength. Earnings were strong in Q1. S&P 500 Companies in Q1 had the fastest earnings growth since 2010 at 25% and the most upside surprises since at least 2008. The tech sector led those upside surprises.

For Q2 the earnings growth rate expectation, according to FactSet has crept up to 20% for the S&P 500.

Tech Stocks Leaders In Earnings Growth

Expectations for tech stocks are moving up for Q2 from 21% growth to now 25% growth. When analysts numbers move up it’s usually a bullish sign.

We’ve said we’re very bullish for tech stock earnings for Q2.

We want to listen to see if trade concerns might affect guidance for Q3 at all. Initially we think that the revenue acceleration from 2017 to Q1 to Q2 could offset any weakness making Q3 still show strong.

Conclusion

The market has shown incredible resilience and has the potential to break out. Earnings season just may be that catalyst.

Hitting Tech Stock Earnings Home Runs

Above we talked about our top down view. If you’d like to know about our bottoms-up work we have a free trial. We spoke to the top 60-70 tech companies over the last few months to identify what tech stocks have home run earnings stories. Finding those few tech stocks that have realistic earnings trajectories way above the Street can give you conviction to see a stock through to big upside. Dip your toe in the water with a free trial.

We’re about to hit our prime time, earnings season.

START FREE TRIAL

Read Reviews

All investments have many risks and can lose principal in the short and long term. The information provided is for information purposes only and can be wrong. By reading this you agree, understand and accept that you take upon yourself all responsibility for all of your investment decisions and to do your own work and hold Elazar Advisors, LLC, and their related parties harmless.

We have no holdings in the stocks mentioned unless otherwise noted.

Stock Market’s Next Move

The stock market has been on a roller-coaster ride the last two weeks but has shown some support. We still see a downtrend but we’re going to let the market tell us what it wants to do next and we’ll tell you what we’re watching.

The S&P 500 ETF SPY (NYSEARCA:SPY) closed yesterday just below June 25th’s open when we turned cautious. That’s when trade war news intensified.  Since then China’s vowed to strike second, not first.

Trade War Summer Vacation?

Looking at the sequence of potential events, striking second could give the market a break from trade concerns for a few months.

This is what The Wall Street Journal said,

“Mr. Trump’s threat to levy tariffs on another $200 billion also won’t be ready to put into effect until the late fall because the U.S. has to clear a number of procedural requirements.”

That can act as good news especially since China said they will not strike first. If China has to wait for the fall for the next round of tariffs this trade war escalation could go on vaca.

So as China answers the current US tariffs, The US will not yet be able to implement the next round until the fall. That would mean that the tariff part of this story could take a break which could be good for markets.

S&P 500 SPY ETF Chart 

SPY ETF Chart levels
Source

We want to watch the stock market to see what it wants to do. For now we think we are still in a downtrend and so don’t want to say the market is turning up until we see it actually turn up.  We also see big resistance overhead as we drew in the chart.

Fundamentally a great case can be made that stocks should go down based on the trade war but so far the stock market is holding up very well.

We don’t want to think we can outsmart the market but rather want to try to understand where it’s going.

Market Action: Putting It All Together

When looking at markets you want to integrate what the market’s saying it wants to do with the news that it’s fed. The fundamentals are one thing but how the market responds to those fundamentals is ultimately what matters. Fundamentals alone don’t drive stock prices. Market participants reaction to those fundamentals drive stock prices.

For example, if shorts don’t see the market go down they’d need to cover which can cause the market to go up on bad news. If it happens that would be a bullish sign of bad news-good action. That would be a case that despite bad news the market couldn’t go down which could cause buying follow through.

For earnings events, the fundamentals are the over-riding driver to stock moves that day which is why we speak to so many tech companies to try and understand an individual company’s most important driver, earnings.

But for markets there are so many influencing factors and investors positioning. We want to understand what the sum total of all of those decisions are saying by watching the trend and reaction to the news.

By watching what the trend is and how the market consumes all that fundamental data you start to see what the market wants to do.

When you get bad news like a trade war and the market doesn’t want to go down, in essence it may be telling you it wants to go the other way, higher.

We’re not there yet. We still see those downtrends and that overhead resistance. But we want to always respect markets and the next few days are critical to see what the market wants to do.

Hitting Tech Stock Earnings Home Runs

Above we talked about our top down view. If you’d like to know about our bottoms-up work we have a free trial. We spoke to the top 60-70 tech companies over the last few months to identify what tech stocks have home run earnings stories. Finding those few tech stocks that have realistic earnings trajectories way above the Street can give you conviction to see a stock through to big upside. Dip your toe in the water with a free trial.

START FREE TRIAL

Read Reviews

All investments have many risks and can lose principal in the short and long term. The information provided is for information purposes only and can be wrong. By reading this you agree, understand and accept that you take upon yourself all responsibility for all of your investment decisions and to do your own work and hold Elazar Advisors, LLC, and their related parties harmless. We have no holdings in the stocks mentioned unless otherwise noted.

Tech Stocks: Trump Out On Trade Today?

Tech stocks could face a hurdle today as President Trump’s official decision on trade could be out today. White House press secretary Sarah Huckabee Sanders said Monday, “we expect that to be out soon.” Reports from news agencies expected a decision by today. Treasury Secretary Steve Mnuchin said discussions were expected Friday but not necessarily an announcement.

Reuters reported earlier in the week that it’s expected US “restrictions are announced on Friday.”

Tech Stocks Pushed Around

QQQ chart
QQQ ETF

The tech stock heavy NASDAQ ETF QQQ stock price is down 2.25% on the week and was down 3.4% for the week at its lows on Thursday.

The confusion over the next step in trade talks is pushing around tech stocks because many have big exposure to China. The US looking at export controls could risk tech stock revenue estimates later in the year which is causing stock volatility.

First Round Of Tariffs Coming

The first round of both US and China’s newly instituted tariffs begin July 6th. That will make products more expensive and the risk is it could slow down spending. The real risk as we see it are the export controls mentioned above which would not only slow spending but could cut revenues.

Our Take

We see the major indices like S&P 500 ETF (NYSEARCA:SPY) and QQQ (NYSEARCA:QQQ) all turning into a downtrend which adds risk to the news over the next few days.

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All investments have many risks and can lose principal in the short and long term. The information provided is for information purposes only and can be wrong. By reading this you agree, understand and accept that you take upon yourself all responsibility for all of your investment decisions and to do your own work and hold Elazar Advisors, LLC, and their related parties harmless.

Bullish Stock Market Action Around G-7

The news is one thing but how stocks react is more telling. You had a crossfire of G-7 trade threats premarket Friday. Even after a down open the S&P 500 SPY ETF managed to close higher.

The market time and time again is telling you it wants to go higher. It’s eating up many trade scares and other ‘bad news’ and has managed to rise anyway.

We’ve pointed out many times over the last few weeks that the market’s action is very bullish.

S&P 500 ETF SPY
Source

Despite rates spiking the market didn’t crater. Recently when China and North Korea news turned negative the market didn’t budge. We’ve seen the same story many times of late.

Even with all this bad news NASDAQ quietly found its way to a new high.

We think the S&P 500 SPY is next. Are you positioned?

It’s one thing to read the news but more important is how the market consumes that news. Not going down on ‘bad G-7 news’ is another example of amazing market action.

It’s bullish.

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All investments have many risks and can lose principal in the short and long term. The information provided is for information purposes only and can be wrong. By reading this you agree, understand and accept that you take upon yourself all responsibility for all of your investment decisions and to do your own work and hold Elazar Advisors, LLC, and their related parties harmless. Model portfolio trades and positions are hypothetical to be used for directional analysis and ratings purposes.