Will Shaky Support Give Way?

bridge

by Steven Sarnoff

This morning, we are seeing support for stocks being tested.  As the Trump reflation trade loses air, will shaky support give way?  In my opinion, it will.

Following the election, the market was juiced on big bets that Trumponomic policies would boost US growth and inflation, hurting T-bond prices (lifting bond yields). Well, what have we seen? In the wake of Yellen and crew’s action on interest rates, GOP failure to reach a consensus and the abrupt end to health care legislation, and Mr. Trump’s rocky Beltway honeymoon, bond prices have been rising (yields falling).

The outlook continues to dim for the President’s political agenda and promise of a business boom to get smooth passage through the halls of the Capitol. But what does market price action say? Last Tuesday’s sharp and decisive decline, depicted by a long black candle line, showed sellers gaining the advantage. Bulls may be circling the wagons, but emboldened sellers are chipping away at support (demand). In my opinion, precarious support is likely to give way over the weeks ahead.

iwm032717

Support is at $130-$132 and $124-$127.  Resistance is at $135-$136.24 and $138-$141.

Subscribe today to see how Options Hotline readers are staying a step ahead of the crowd.

Let me know if you have any questions.  i always enjoy hearing from you, even when you tell me my picks are “crazy.”

Good luck in your trading.

Best regards,

Steve

 

 

2 thoughts on “Will Shaky Support Give Way?

  1. Thanks for your posting. One other thing is the fact individual states in the United states of america have their particular laws that affect people, which makes it very difficult for the Congress to come up with the latest set of recommendations concerning home foreclosure on people. The problem is that every state features own laws and regulations which may have interaction in an undesirable manner when it comes to foreclosure guidelines.

Leave a Reply

Your email address will not be published. Required fields are marked *