Friends
Stocks tried to sell off at the opening this morning, but the bears just couldn’t muster very much enthusiasm. Word that the China trade talks are progressing, and a good earnings release from Walmart were enough to spark modest interest from the bulls and stocks moved into positive territory for the rest of the trading session. Perhaps, the bulls are sensing that things have moved into very overbought territory, leaving both combatants a bit tentative at this point.
For the day, the Dow Jones Industrial Average was up 8 points to close at 25,891. The S&P 500 was up 4 points to finish the day at 2,779. Gold was up $20 to trade at $1,342 per ounce, while oil was up $.53 to trade at $56.12 per barrel WTI.
As oversold as we were on Dec. 24th of last year, is about as overbought as we are right now. We can work off the overbought condition one of two ways (or both actually)- price or time. A little sideways action might be what the doctor ordered for the bulls, to digest some of these early first quarter gains. Of course, the market is going to do what the market is going to do. But, as economic data continues to be mixed and corporate earnings are certainly not going to be as strong as last year, we are beginning to see P/E expansion once again, fueled by dropping interest rates (the 10 Year Treasury Note now yielding 2.64%). Moves like we saw in the 4th quarter of last year, and the first 6 weeks of this year adds to the difficulty of predicting stocks price movements as we move further into 2019. Stay tuned, we’ll be providing the play by play.
Have a nice evening everyone.
