Stock Market Analysis: Outside Influences

Bill Poulos is a published author, stock market investor, and a retired General Motors executive. After a thirty-five year career, he took his hobby of investing and co-founded Profits Run, Inc. with his son, Gregory Poulos. The company exploits Bill’s investment experience while educating investors on making calculated trades with minimal risks. Profits Run is a publishing company that provides financial content, like videos, articles, software programs, and coaching to the investment community. Bill has a BS in Engineering and an MBA with an emphasis in finance. Bill Poulos’s books can be read on Amazon’s Kindle. He contributes to online news platforms with regular updates on current economic events. Bill got married in 1969 to his high school sweetheart, Karen. They live in Wixom, Michigan. Bill and Karen have three boys and two grandchildren. Here, Poulos gives us an update on this week’s Stock Market.

This week in the stock market was an interesting one as we saw many outside events influence what happened to the price action. First, but not necessarily an outside event, was the release of the FOMC announcements. In their meeting the Fed determined the best course of action would be to lower interest rates by a quarter basis point. While this was the consensus, there was a vote to lower by 50 basis points and one to keep things the same. While there was a move to lower rates, we saw that there were some, including President Trump who wanted to see a bigger move down in the rate. This announcement came out as expected so we didn’t see a huge move like we would have seen if the expectation did not meet or exceeded the expectations.

There were also issues surrounding the drone attacks in Saudi Arabia and what the response from the US would be, if any. There are still talks about military action taking place as well as economic sanctions. We will want to keep an eye on this over the weekend as things continue to develop. In addition to these, there is still the issues surrounding the US-China trade agreement and whether something can be done to help both countries get what they want. The longer this drags on the more impact we may see in the stock market. Finally, the employees at GM went on strike and many have been furloughed causing concerns about how long this might go on.

This upcoming week we don’t have quite as many big announcements, but we do have a lot of them. Many of these are events with the members of the FOMC so we can see a lot of volatility coming from them. Make sure you are using good risk management so you can avoid unnecessary losses from having too big of a position size.

Look at the weekly charts of the DJ-30, SP-500 and the NASDAQ:

DJ-30:

Profits Run Dow Jones

This week we saw the stock market move mostly in a flat choppy range where we didn’t get much direction. As you can see on this chart, the price is approaching the all-time high areas. This is an important transition area where price may bounce down from the resistance area or we could see price break up and through this area to make new highs. This may be decided by the news and the geo-political issues that may come up.

SP-500:

Profits Run SP 500
Profits Run SP 500

The weekly chart of the SP-500 is another example of a strong bullish movement in the markets over the last 4 weeks. This is likewise sitting near the all-time high and may be influenced by the upcoming weekly news so make sure you keep an eye on what it does.

NASDAQ:

Profits Run NASDAQ
Profits Run NASDAQ

The weekly chart of the NASDAQ also shows a strong bullish direction but is not as close to the all-time highs as the other indexes. If we get a move down this next week, we may see a new lower high develop. This may be the beginning of a longer term move back down. Again, the news this week will likely determine the direction prices move.

Make sure you are aware that there are many issues going on right now that can impact the price action in the markets so make sure you are prepared and are using good risk management.

Bill Poulos is an author, retired automotive executive (General Motors), and co-founder of Profits Run, Inc. Bill offers insight into the economy and trading.

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