Trading Outlook: When A Dog Is The Stock Market’s Co-Pilot

The market saw relief after the July 4thholiday.

The S&P 500 (NYSEARCA:SPY) went back to an unconfirmed Bullish phase, which means it closed back above the 50-DMA.

It also means it needs a second close above the MA to confirm.

Semiconductors (NYSEARCA:SMH) improved in phase to Warning by closing over its 200 DMA.

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The Russell 2000 (NYSEARCA:IWM) and NASDAQ 100 (NASDAQ:QQQ) have begun to put their 50 DMAs in the rear view mirror.

Even Transportation (NYSEARCA:IYT) sluggishly hit the gas pedal, marginally clearing its 200 DMA to go into an unconfirmed Warning Phase.

The market is taking yet another joy ride in its classic bullish buggy.

Nonetheless, who is driving, an older gent who like this current bullish market may be a bit well, old??

Or, a dog? Adorable, sweet, but easily distracted?

If one looks at the Dow, that remains the weak link.

In the final seconds of the trading day, it traded just above the 200 DMA.

Yet, it still gets my vote for the first of the four indices most likely to succeed in breaking the 50-week moving average.

None of the indices have closed a week under the 50-week MA since November 2016.

The Fed certainly cast doubts on the economy today with the FOMC minutes.

Some members expressed concerns about the overheated economy leading to heightened inflation and a significant economic downturn.

Others expressed concern about the adverse inpacts of tariffs.

Therefore, typical of the classic move, the 20+ Year bonds rallied, along with the market. (As if low rates will help in the long run.) It won’t.

Also, the dollar declined and utilities advanced.

So that’s 3 places where money ran to or from for safety.

Perhaps the most interesting piece of information came from Neil Irwin of the NY Times.

“…a trade war simultaneously risks pulling growth rates down while pushing prices up. Anything the Fed seeks to do to cushion the blow on one side of that equation would tend to make things worse on the other side.”

With inflation above 2%, low rates could spell disaster in the not-so-distant future.

So, go ahead and take in the lovely sights while you can.

But be on the lookout in case the old bull slumps over the wheel. Otherwise, the dog of the Dow might wind up your chauffeur.

S&P 500 (SPY) Back to an unconfirmed bullish phase confirmed. 271.85 pivotal 50-DMA. 274 resistance to clear. Subscribers: Positive Pivots in all

Russell 2000 (IWM)164.80 pivotal support to hold with resistance at 167.37.

Dow (DIA) Inside day at the 200 DMA. Makes 243.48 the 200 DMA point to hold. 239.80 the 50-week moving average support

Nasdaq (QQQ)Inside day. 170.25 the 50 DMA support. Big resistance at 174.174.50

Twitter:  @marketminute

The authors may have a position in the mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.