EB Daily Market Report - Special Edition - Wednesday, February 7, 2024
Live Trading Room Cancelled
I apologize and I'm sorry for any inconvenience, but we had to cancel this morning's Live Trading Room, scheduled for 10am ET. I lost power this morning literally two minutes before our morning show, Trading Places Live, was set to begin. Unfortunately, power was not scheduled to be restored until this afternoon, prompting the cancellation
We'll be back next Wednesday at 10am ET for the next Live Trading Room.
Brief Market Update
We're seeing mostly higher prices again as the secular bull market carries on. Don't be surprised by pullbacks from time to time, but also do NOT be surprised at all by a continuing advance. Bull markets take no prisoners. I remember discussing the resumption of the bull market back in November and I received several comments saying essentially, "why would you suggest for investors to buy at the top?". Well, the past 2-3 months history now shows that November was not a top. Rather, we've seen all-time highs cleared on many key indices.
Key Stocks and Their History
Recently, we provided a PDF on the S&P 500's long-term trends since 1950. If you haven't seen it, it's absolutely worth your time to check it out. CLICK HERE to gain immediate and free access.
I've been discussing lately the TENDENCY (not guarantee) for our major indices to struggle from mid-February through early March (even through the end of March). The first half of Q1 has historically performed MUCH BETTER than the second half of Q1.
To provide further evidence of the negativity that typically surrounds the second half of February, I'm highlighting below the annualized return of the each individual stock shown during the February 16th through February 29th period since this bull market began in April 2013. These are key stocks that heavily influence our major indices and they're in order of February 16th through February 29th annualized returns (since 2013):
- META: +32.54%
- AVGO: +20.63%
- TSLA: +2.77%
- NFLX: -12.75%
- NVDA: -15.22%
- CSCO: -19.23%
- AMZN: -32.71%
- ADBE: -45.28%
- MSFT: -48.26%
- GOOGL: -49.01%
- SBUX: -52.70%
- COST: -56.22%
- INTC: -76.66%
- AAPL: -90.60%
Once again, let me emphasize this represents a strong tendency to move lower, in my opinion. But these stocks could easily move higher. But when I evaluate stock market risk at any given time, history plays a role. These numbers clearly make me nervous, especially with the S&P 500 now up against psychological price resistance at 5000.
Negative divergences should not be ignored either. A big reversing candle at 5000 or even just above it would suggest higher risk of a short-term decline. I keep waiting for it, but the bulls have remained in charge. Meaningful earnings reports will begin to slow over the next week or two, so the stock market will need a catalyst to continue driving prices higher.
I hope you find this information useful. I doubt you'll find it anywhere else.
Happy trading!
Tom