• Elite Gentleman

What's going on with the stock market this week? Has the rally begun? (week 8)

Well we had quite the sell off, but is it time for the market to rally? I happen to think so. Despite my extremely negative attitude about the market 2 weeks ago, I think a few things have turned in our favor.


1 year chart of the S&P from yahoo

First, I think we saw the final WHOOSH, that everyone on cnbc has been talking about. That Christmas eve sell off where everyone who wanted to get out got out. Then we had a MASSIVE turn around in the DOW last week, where the dow was down 600 points and rallied back to finish the day up 300. That shows a strong buying power. Then just a day later we saw a 1000+ point rally in the DOW which was the largest single point gain...EVER. This shows even more appetite in the market for buying. I think we had some serious tax loss harvesting holding us back as well as a bunch of worry over the fed telling us to buckle up and take it.


That being said, I see a few catalysts in the beginning of the year. First, we are going into an under anticipated earnings season. I think this earnings season will surprise to the upside and help the market rally (especially tech). Second, I think we will see progress on the trade talks as both countries are now desiring a deal. Third, I think the simple turn of the calendar will help us as people will no longer be selling to harvest losses for taxes. Fourth, I think the market just got a bit too cheap. If you check our article about index PE's here you'll see that the S&P and DOW got to 15 and 14 forward PE ratio's which is historically quite low. Hard to not buy that ugly Christmas sweater when it's own sale... With those 4 catalysts we will wait and watch this earning season, as I think it holds the keys to a rally.


So as always, God Bless and may the odds be ever in your favor...



Also here's a disclaimer that you should read:

This stock advice are just my personal opinion. I am not a professional stock picker or analyst. I may make trades on the information provided here and as a result it is possible for me to hold a position in the mentioned stocks.

The information provided here is for informational purposes only. It should not be considered legal or financial advice. You should consult with an attorney or other professional to determine what may be best for your individual needs.

I do not make any guarantee or other promise as to any results that may be obtained from using the content. No one should make any investment decision without first consulting his or her own financial advisor and conducting his or her own research and due diligence. To the maximum extent permitted by law, I disclaim any and all liability in the event any information, commentary, analysis, opinions, advice and/or recommendations prove to be inaccurate, incomplete or unreliable, or result in any investment or other losses.

Content contained on or made available through this email is not intended to and does not constitute legal advice or investment advice and no attorney-client relationship is formed. Your use of the information is at your own risk.

© 2018 by Graziadei LLC