Courtesy of John Nyaradi.
Stock Markets will likely rise on Monday due to last week’s positive momentum moving forward this week
US stock markets will likely rise for Monday, as investors seem poised to keep the bulls running hard after last week’s volatility. The S&P 500 (NYSEARCA:SPY) added .65% on Friday to close at 1744.50 (which is a new record), while the Dow Jones Industrial Average (NYSEARCA:DIA) added .18% to close at 15,399.65 and the NASDAQ Composite (NASDAQ:QQQ) added 1.32% to close at 3914.28.
Last week was a tough one as I only called one correct day out of five trading days. Investors appeared so certain that a US default was off the table, contrary to my belief that the US can default under certain political circumstances. Naturally, I understood the “no default” relief rally on Thursday and Friday, despite the fact that we will be facing this problem again in February.
So for Monday, October 21st, I am predicting a stock market rise, due to the fact that the bulls are still in control and that investor sentiment appears to be fueled by greed and the need to see just how high markets can go.
From a technical perspective, the S&P 500 (NYSEARCA:SPY) has a very robust MACD at 5.516 and a rising RSI at 65.89. The index is showing no signs of slowing down anytime soon, although my first red alert will come when the RSI rises above the 70.0 threshold, indicating an overbought situation. So with momentum on the bulls side, I say let the bulls run for Monday:
chart courtesy of stockcharts.com
International markets are already trading in the green at the time of this writing, with the Nikkei Index (NYSEARCA:FXY) trading into solid 1% gains and the Hang Seng Index (NYSEARCA:EWH) adding half a percent. European markets finished last week well into the green, with the FTSE 100 (NSYEARCA:EWU ), DAX (NYSEARCA:EWG) and CAC 40 (NYSEARCA:EWQ) all clearing over half a percent. All of these performances bode well for the Bulls on Monday.
US futures markets are also trading green at the time of this writing, suggesting more positive investor sentiment for Monday.
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