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US Markets 10-Feb-2020: Expect uptrend to continue in strong markets

Key points for the week (US Markets):


  • In spite of recent fears from Corona Virus and slowdown in global trade, the US market remains strong

  • SPY (S&P 500), DIA (Dow Jones Industrial Average) and QQQ (NASDAQ100) – all are rising in a parallel channel

  • While the indices are approaching top wall of the respective channels, we may expect a small pullback, but there is nothing to suggest any weakness in the big picture

  • Better than expected jobs data as well as declining bond yields and oil prices are expected to help stock markets continue its trend



All the key indices in the US markets – S&P500, DJI and NASDAQ100 – all are trending upwards in parallel channels and pretty much in a synchronized move.


DAILY PRICE CHART SPY (S&P 500 ETF)


DAILY PRICE CHART QQQ (NASDAQ 100 ETF)


DAILY PRICE CHART DIA (Dow Jones Industrial Average ETF)


As we see that QQQ which is the leading among these indices is hitting the top of the channel, we may see a slight pullback.


Among the supporting factors that would aid stock market indices to continue uptrend are the falling bond yields and oil prices. Both the 30 year US Treasury bonds and 10 year US Treasury note yields are very low and moving closer to the all-time low values. The crude oil prices have sharply declined from near 66 to below 50 within a month. In addition, the better than expected non-farm employment report is a good news for the economy and the market has been happy about it.



Given all these factors, we expect the markets to resume the bull trend, perhaps a little slowly.


OUTLOOK AHEAD US MARKETS


There is nothing different about the forecast in the US markets. All stock indices appear strong, and we expect markets to continue in their respective uptrends. As the indices approach top of the respective parallel channels, there can be a small pullback before next rally.