The stock market rally hit some turbulence Friday as weak earnings from Snap (SNAP), Seagate Technology (STX) and Intuitive Surgical (ISRG) weighed on sentiment but overall it was a good week at WallStreet last week.
There are good reasons to be optimistic about a tradable rally, but several high-profile earnings reports next week will likely dictate the action, including results from the remaining four FAANG stocks: Google parent Alphabet (GOOGL), Amazon.com (AMZN), Apple (AAPL) and Meta Platforms (META). And don't forget about the two-day Federal Reserve meeting where the Fed on Wednesday is widely expected to raise its key lending rate by another 75 basis points to a range of 2.25% to 2.5%. Another rate hike is expected in September, although the chances for another 75-point hike have faded as the bond market weighs the possibility of a soft landing for the U.S. economy.
Caution is still advised!!!
Our risk model for the US stock market further improved last week:
Most of the technical indicators in our risk model are now showing a green light:
New 52w Highs / Lows Stocks above / below 200d MA Volatility Index VIX Up / Down Volume Advance-Decline Line
Also, the psychological indicators bulls vs bear and margin debt are favourable and would support a new bull market rally.
What does that mean for swing traders?
By now, swing-traders should have opened the first positions and be invested by 30-60%. Market exposure can be increased in case the stocks in your own portfolio show sustainable traction. Apply progressive exposure in your trading and always think risk first!