Scalper1 News
It was a volatile day as major averages finally closed roughly midbar on lower but above average volume after sharply rising then falling twice as oil and junk bonds continued their slide. The attempt at finding a low was logical given that the NASDAQ Composite had finally undercut its August 24th low, the last of the major indexes to do so. The market’s recent bounce off of the mid-January lows was the weakest in years, underscoring the downtrend. In addition, signs of recession are looming as S&P 500 stocks are looking to post two quarters in a row of declining earnings since 2007-08. Federal Reserve Chairwoman Janet Yellen, in remarks released before the start of her appearance before Congress this morning at 10:00 a.m. Eastern time, sounded a bit more cautious about the outlook for the U.S. economy but did not back away from expectations for additional, gradual, interest-rate hikes. “Ongoing employment gains and faster wage growth should support the growth of real incomes and therefore consumer spending, and global economic growth should pick up over time, supported by highly accommodative monetary policies abroad,â Yellen said. Yellen remained quiet about the U.S. central bankâs own forecast, made in December, that it would raise interest rates four times in 2016, but stressed the Fed was not in automatic tightening mode. âMonetary policy is by no means on a preset course,â Yellen said. Indeed, the Fed seems to be taking a wait-and-see approach. This comes as no surprise as Yellen must walk a tightrope between the prospect of hiking rates vs. a recessionary global economy which would likely pull the U.S. economy down with it. Futures were up strongly prior to her testimony then backed off somewhat. Her testimony may be perceived as too hawkish as some were hoping she would discuss the possibility of negative interest rates. Oil is trading lower and the overall stock market downtrends remain intact, so watch for potential short-sale set ups as they emerge in the coming days. Avago Broadcom (AVGO), discussed in a Short-Sale Set-up (SSS) report sent out this past Friday before the open, is approaching the first downside price target at the 117.17 low of January 20th. Over the past two days it has undercut the January 27th low at 120.09. One can either look to take profits on the undercut of the 1/27 low, or simply use the 200-day line at 129.31 as a trailing stop for any position taken at the 50-day line near 136 last Friday when we first reported on the stock. Scalper1 News
Scalper1 News