📈Stock Indexes Pause at Key levels

This week we had NY Empire manufacturing Index released on Monday with a reading of -31.5% versus an estimate of 5%. This is the worst reading since the April 2020 Pandemic global lockdown. The same day the national association of homebuilders index reading came in at 49. The estimate was 55. Anything below 50 is contraction and a reading of this level has not been seen as well since the pandemic. Despite the bad economic news releases that markets went higher. It’s an important signal when the markets shrug off bad economic news. It means its better than expected or its factored in. In any case we rallied. The rallies have been on light volume and I believe this is based on investors afraid of being burnt again. Too many rallies have ended in failed breakouts leaving most investors worn out. Sadly this is when bottoms are formed. Bottoms in the stock market are formed when investors do not want to believe the market will go higher over the long term. They believe the inevitable rolling over and testing the lows will happen. No one knows for sure when a bottom is in. We can only speculate based upon macroeconomic, fundamental and technical factors. In my opinion after looking at all three I think there is a case for it. Inflation not transitory talk started in November 2021. This led to talk a month later of a possible rate hike. Both times it peaked the indexes. In June we had peak CPI release followed by a lower number in July. Since that date we have not gone lower in the indexes. While 8.4% inflation is still insanely high we are going in the right direction. Fundamentally we are seeing companies such as Walmart and Home Depot confirm guidance and issue in line results. Walmart went out and confirmed guidance out to 2023. This is not to be taken lightly and one of the reason the retail sector looks attractive after being hit so badly. Technically , we have not been this high above the 21 day moving average since Oct 2021 . We have been making consecutive higher lows in the indexes since June. While pullbacks are always possible and necessary. In my opinion they will continue to present buying opportunities now barring any massive geopolitical or unforeseen event. I get into the specific levels to watch in the video below. Let’s get to it!

Let’s Look at our Indexes

Let’s Look at our Stocks

Subscribe and turn on notifications. There is a new daily video after the market Monday through Thursday! It’s called the Top 5 in 5. It consists of the best five ideas for the next day and I condense it into 5 minutes. It’s loaded with actionable ideas. It’s worth your time. It is hyper specific and actionable. Tonight’s includes Longs and Shorts. When you subscribe turn on ALL notifications so you are notified of the daily Premarket live shows ,Top 10 Weekly Buy List and educational videos. Also, Once subscribed you will receive private content on YouTube. The video below is the Top 5 from tonight and focused on several technical levels. Pay close attention to what is said about all the BBBY Key Levels and the placement of the SPY . It’s very important for tomorrow.

As always all investment decisions need to be made by the individual. We all have different risk profiles. No two people trade the same. Understand the buy points, stop losses, trims are suggestions. You need to develop your own process. I am willing to help. If you have questions email me Arete@Aretetrading.net. For example, to stop losses, I like to see them close. That does not mean that fits everyone’s risk profile.

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