Daily and Weekly Chart sell signals were triggered by my computer trading algorithm in the following indices (charts shown below):
Nasdaq Composite Index (Daily and Weekly Charts)
Nasdaq 100 Index (NDX) (Weekly Chart)
Nasdaq 100 Index ETF (QQQ) (Weekly Chart)
Russell 2000 Growth ETF (IWO) (Daily and Weekly Charts)
Daily and Weekly Chart sell signals were triggered last week in the following key FAANG stocks:
FaceBook (FB) (Weekly Chart)
Apple (AAPL) (Weekly Chart)
Google (GOOG) (Daily Chart)
NetFlix (NFLX -16%) and Tesla (TSLA -21%) are now down sharply from their mid-June highs, and Intel (INTC) is now down about 17% from its early June high.
Outstanding leadership from the technology sector has been the single most important positive contribution to investment returns in the overall market this year so far. As this leadership clearly begins to fade, will the broader market suffer a major correction or will positive rotation into other sectors keep any potential selloffs minor? Of course, the answer to this question will dictate the direction for U.S. stock prices over the rest of this year and beyond.
Is it too early to begin thinking about the possibility that the Executive Branch of the U.S. Government may soon be led by Vice President Mike Pence? Last week's news that President Trump's long-time attorney Michael Cohen appears willing to testify against Mr. Trump on critical legal issues may soon turn the tide of public opinion in favor of possible impeachment. While Cohen's apparent "flip" against Mr. Trump is important, what's more significant and interesting to me is the subpoena of Allen Weisselberg, the Trump Organization's chief financial officer, to testify before the grand jury empaneled in the Michael Cohen
investigation by the Southern District of New York, as first reported last week by
the Wall Street Journal. Mr. Weisselberg clearly knows most, if not all, of the financial dealings of the Trump Organization over the last 40 years at least!
If the Democratic Party wins back both Houses of Congress in the upcoming November elections, impeachment proceedings are likely to begin in January 2019. The Special Prosecutor's report (from Robert Mueller's Office) to Congress on Russia's intervention into the 2016 U.S. elections is likely to be extremely damning for President Trump. Potential charges include conspiracy with a foreign power to influence our elections (felony), multiple campaign finance violations (felony), money laundering (felony), tax fraud (felony), abuse of power (impeachable offense), and obstruction of justice (felony). If the Democratic Party wins both the House and the Senate in the upcoming November elections, the heat on President Trump may become too much! His presidential power will be greatly diminished and potential criminal probes against him may become overwhelming!! In my view, Mr. Trump will only have one move left to save himself and his family from impeachment and possible criminal prosecution. Between November 6th, 2018 when the Dems win both Houses of Congress, and January 15th, 2019 when the Dems take control of both Houses of Congress, I believe that there is a strong probability that Mr. Trump will resign from office with a full pardon from President Pence. I don't think it's too early to begin thinking about the ramifications of a Pence Presidency on the U.S. and global financial markets.
If the Democratic Party wins back both Houses of Congress in the upcoming November elections, impeachment proceedings are likely to begin in January 2019. The Special Prosecutor's report (from Robert Mueller's Office) to Congress on Russia's intervention into the 2016 U.S. elections is likely to be extremely damning for President Trump. Potential charges include conspiracy with a foreign power to influence our elections (felony), multiple campaign finance violations (felony), money laundering (felony), tax fraud (felony), abuse of power (impeachable offense), and obstruction of justice (felony). If the Democratic Party wins both the House and the Senate in the upcoming November elections, the heat on President Trump may become too much! His presidential power will be greatly diminished and potential criminal probes against him may become overwhelming!! In my view, Mr. Trump will only have one move left to save himself and his family from impeachment and possible criminal prosecution. Between November 6th, 2018 when the Dems win both Houses of Congress, and January 15th, 2019 when the Dems take control of both Houses of Congress, I believe that there is a strong probability that Mr. Trump will resign from office with a full pardon from President Pence. I don't think it's too early to begin thinking about the ramifications of a Pence Presidency on the U.S. and global financial markets.
Bottom line: Between now and November 6th, 2018, I strongly believe that the U.S. stock market will correct at least 20% from last week's intra-day highs in every major index. Besides the toxic political atmosphere, working against higher stock prices is the current U.S. monetary policy which can only be described as tight and getting tighter! Several more interest rate hikes are projected by and from the Federal Reserve, and the steady, ongoing reductions in its balance sheet are clearly starting to impact the financial markets and consumer behavior. Higher domestic interest rates are already negatively impacting the auto and housing markets, and the U.S. consumer is reeling under too much personal debt and sharply higher energy costs. Cash will be king for investors for at least the next several quarters!
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| Apple Weekly Chart |
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| FaceBook Weekly Chart |
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| Google Daily Chart |
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| Nasdaq Composite Daily Chart |
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| Nasdaq Composite Weekly Chart |
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| Nasdaq-100 ETF (QQQ) Weekly Chart |
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| Russell 2000 Growth ETF (IWO) Weekly Chart |
