Volatility is the theme in the 2018 markets. And while the markets have bounced about since our last issue, at least the momentum has been upward, with the Dow Jones Industrial Average gaining almost 600 points.
The economy continues to grow at a healthy pace, with job openings increasing, unemployment steady and consumer sentiment rising.
Market sentiment, as you’ll see in our Advisor Sentiment Barometer and our Market Views remains bullish, although some of our contributors are expressing caution in the long run.
Wall Street’s Best Investments 803
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Market Views
Bullish, but Choppy
The relative strength of small stocks is trying to turn higher, while growth stocks continue to lead value by a solid margin. With the Value Line Geometric Index at 564.37, the Value Line Plan remains in the market with a Friday sell stop of 555.59.
Our outlook for stocks remains positive. One important factor is the performance of the various advance-decline lines we follow, all of which are strong and leading stocks higher. The next few weeks will be critical as the averages try to establish new highs. Expect crosscurrents and a choppy market. Be careful out there.
John Bollinger, The Bollinger Band Letter, www.bollingerbands.com, 310-798-8855, March 17, 2018
Caution…
The market’s trading range is narrowing over time. This is usually a bad sign because the move that began the range was a decline, or so say some market technicians.
We do believe that the market could be in for another serious decline. If the economy revs up substantially and that translates to rapidly growing corporate profits, we will see the market start to show gains again. But there is very little to convince us that the correction is finished. In fact, we believe that the Dow could fall 5,000 points from the peak which would project a possible decline to around 21,500.
We will continue to remain cautious and hold cash waiting for a good buying opportunity.
Sean Christian, The Personal Capitalist, 9524 East 81st Street, Suite B #1715, Tulsa, OK 74133, March 16, 2018
Fed Watching
Looking ahead, tech could continue to outperform, if this stock market signal is any indicator.
Coming up, the marquee event for traders is the Federal Open Market Committee’s (FOMC) two-day policy setting meeting, with Wall Street largely expecting a Fed rate hike. Fed Chair Jerome Powell will also be in focus, with the new central bank head participating in his first press conference following the policy announcement.
Bernie Schaeffer, Schaeffer’s Investment Research, www.SchaeffersResearch.com, 800-327-8833, March 16, 2018
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THE NEXT Wall Street’s Best Investments will be published April 18, 2018
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