More Gains in the Cards - Market Update from QuanTimer for June 20, 2019

General Market Update
The equity market finished higher yesterday with S&P500 rising 0.30% and Nasdaq composite 0.42%. The market was subdued or rather on a holding pattern until 2PM, when the FOMC statement was released. The Federal reserve left the rate unchanged, but hinted that rate cuts could be in the offing.

Market breadth was positive with advancing issues outpacing declining issues 17:11 on the NYSE and 18:13 on the NASDAQ. Healthcare and Information Technology outperformed along with rate sensitive sectors like Utilities and Real Estate.

Sector performance on June 19, 2019. Source: Barchart

Fed Watch
The Federal Reserve left the funds rate unchanged as expected, at 2.25%-2.50%. The Federal Open Market Committee removed the word “patient” regarding future rate adjustments from its statement, indicating it is more likely to cut interest rates at future meetings. It also mentioned that it would be closely monitoring the data. This is exactly what we had anticipated. MarketWatch reports:
Stock market gains after Fed removes ‘patient’ from policy statement
FOMC holds Fed funds rate steady, will ‘closely monitor’ data

And what did we write on Tuesday? The following two sentences were part of our ‘Conclusion’ in our Tuesday’s article.
“We expect the Fed to hold the rate, but change the words of the statement. The statement will be dovish. Most likely, the word ‘patient’ will be replaced by ‘closely monitoring’ or something of that nature.”

Ratcheting up the stop loss
QuanTimer market stance is bullish at present. Please review our market outlook in an earlier post here -

While we remain bullish in S&P500 and Nasdaq broad indices, we also try to protect ourselves with stop loss and tailing stop loss orders. In one of our base models that is based on SSO, the current stop loss is set at 119.53. The position was opened on June 3rd at 110.66, and SSO closed yesterday at 125.20.

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1 Like

Thanks for sharing your ideas. As regards your comment on Tuesday, you were right on the money. :+1:

Good call on the Fed.

Investors Still Lukewarm with S&P500 at an All-Time High

The percentage of bullish investors is below the historical average, while the percentage of bearish investors is right at the average.
Source: American Association of Individual Investors

CNN Business Fear and Greed Index is at neutral.
Source: CNN Business.

These are contrarian indicators. We continue to remain bullish in the current market.

Happy Trading.