For the last few weeks your Capital Wave Forecast has been highlighting “negative narratives” like the fake recession and fake manufacturing recession narrative, the Fed’s lost control narrative, and how global debt is going to crash markets narrative.
The purpose of highlighting and debunking negative narratives is to warn investors that they should be watching the market go higher and reading Capital Wave Forecast to understand what’s driving markets, and not listening to or reading naysaying nonsense.
There are other negative narratives out there, which we’ll continue debunking, just not today.
Today, we’re catching up with where the market’s been going and what’s immediately ahead for stocks.
The Dow fell 133 points on Friday, but ended up 0.7% for the week. The S&P 500 fell .29% on Friday, but closed the week 0.9% higher. And the Nasdaq Composite, after falling 0.27% on Friday, roared 1.8% higher on the week.
Equities have been climbing over fake narratives and every real hurdle, including the geopolitical upheaval between Iran and the U.S., to meet milestones, like the Nasdaq getting over 9000, easily, and the Dow getting over 29,000 on Friday, before falling back.
Stocks have had an easy time of it, being led higher by technology champions including Apple Inc. (AAPL), Alphabet Inc. (GOOG), Facebook Inc. (FB), and Microsoft Corp. (MSFT). It’s been like Deja vu all over again, and again.
This week could be different.
With speedbumps having been easily traversed and good news almost behind us, investors are going to focus on company earnings, which start rolling this week. Over the next two and a half weeks, 238 of the 500 companies in the S&P 500 report. That’s a lot of data points to digest.
Friday’s action worried me.
After markets traded higher, having digested somewhat lackluster jobs numbers, which included the slowest uptick in wage growth in a year, they fell mostly on profit-taking.
If investors are looking to take profits, and who can blame them after the spectacular run-up stocks have had, the general psychology, which has been benign at worst and euphoric at best, might be turning cautious.
This week looks to be more volatile than what we’ve seen lately.
If earnings are good, markets will react positively. But, if there are more negative reports than investors are anticipating, we’ll see a lot more profit-taking.
That’s going to make the week, and the next few weeks, prone to bigger swings than we’ve seen in months.
No, the bull market isn’t over. Far from it. It’s just going to get a bit bumpier, so buckle up.