Tail of 2 Days

Please check out my YouTube channel for my audio description of the market this week.  

After the market close on Tuesday, Apple announced a lower revision of

their earnings expectation for the first quarter of 2019. This is crazy since we are about to enter earnings season for fourth quarter of 2018. Regardless it drove the market down hard on Thursday with the exception of Netflix and Verizon.

Apple cited reduced sales in China and the trade war having an impact. I was surprised that Amazon and Alphabet (GOOGL) weren't down more. Amazon just broke below 1500 and Alphabet didn't go below 1022. I felt this was a strong sign.

China's market went up on Friday with the expectation of trade talks sooner than later. It drove the US markets up from open and they rallied more after Fed President Powell spoke with Janet Yellin and Ben Bernanke. The market heard positive news that they are reading the market and inflation is not rising. They don't believe that rates will increase more, but they are all wrong.

Inflation is muted because of the huge drop in oil, gasoline and other commodities. As they rise, they will show in I is real as well as s full employment will drive up the price of goods. The Fed will raise rates as planned 2 to 3 times this year.

With more rate increases, the market will experience more volatility. The

best case for a sustainable rally in the market is from great earnings, larger sales and a trade deal with China. Sales will work themselves out as Americans will experience the largest tax reduction and spend that money.

Trading: Thursday was such a negative day that you could have bought Puts at open or waited for everything to come back near the open price to buy Put Options. Selling at the end of the day was best.

Friday proved to be completely opposite of Thursday and Call Options were the best. I traded QQQ on Thursday and Home Depot on Friday.

Wednesday Market Stuff

• Interest rates were a big driver in the market for the past couple of days. The market was mixed today with the higher interest rates as a head wind to a small upside. Macy's (M) held it's gain throughout the day ending the day up 10%. I believe this is a strong stock in an dividend structured portfolio, but don't see much volatility for some time. I could see it hitting $40/share by November.
• Home Depot was down today to the lower levels that it was at yesterday after earnings report. Walmart was up yesterday and again today as they report earnings tomorrow morning before the market open. I could see it dip, but come up big on the conference call.
• Apple made up some of the loss from the last 2 days. Google tried to make it up but gave it all back in the last hour. Nvidia opened down, raced up and went back down to finish the day flat like Google.
• Cisco reported earnings after the market close today and the reaction was not good. I would expect a similar reaction as Home Depot had yesterday. It will start down, bounce up and slowly give some back towards the end of the day.
• Some interesting action happened around 1:45pm today. Boeing (BA) went straight down from 343 to 340.40. That is not a huge movement but when looking at the chart, it was sharp. As was Tesla's movement to the upside at the same time from 283 to 287. I didn't see or hear any news that would have created that kind of reaction, but based on their movement, I would look for them to continue in the same direction Thursday morning before reversing around 10 or 11am.