The stock market rally has stalled out for now at least and may actually be starting to make a drifting top. This is a topic I discussed with Jim Goddard in an interview I just posted. However, most people are very bullish on the market. Either way on Sunday we got news that Trump and China are getting closer to a potential trade deal or truce. It was leaked to the WSJ and talked about all morning Monday on CNBC. You might have thought that this news would have created a big stock market rally, but it didn’t.
Instead the stock market gapped up on Friday and went red. Then yesterday the S&P 500 did the same thing again. TSLA dumped facing a technical TKO knockout and “FANG” fad stock NFLX is starting to fade again too.
When the stock market ignores news like that it is telling you that the upward momentum since the day after Christmas has stalled out.
The Russell 2000 gave a sell signal yesterday. I even had to put out a post on Monday afternoon telling people that they might want to sell TNDM. It went up again big again Tuesday another 4%, but what bothers me is that Jim Cramer pumped the stock on his Mad Money show so now there are going to be thousands of stock chasing weak hands on the stock. The stuff he was saying on the show was so full of hype it was over the top. I liked talking about this stock because it’s fun to point to big winners with you, but now I can’t talk about it anymore. When you have a lot of people buying a stock with no plan you have a stock that can dump more than it should later when these types sell on a whim.
Hey take profits and let’s look for another trade this month is my thinking.
I don’t have a new stock trade for you today, but my buddy Matt Morris is looking to put an options trade on ahead of Friday’s job numbers.
While it’s now tough to make money in these FANG stocks (Apple fell again yesterday) the market is prone to hourly gyrations on big economic news releases and Federal Reserve items that can be played.
Matt has mastered a strategy to play these swings for quick trades. All it takes is two hours a month.
You can get his strategy by clicking here.