Critical week for US stock market.....

This week is extremely critical as to how US stock market reacts to major earnings this week.

Friday's reaction to excellent earning from MSFT is disturbing....

This week earnings reports are being tested against two cross currents, first Federal reserve back peddling expectations of interest rate cut, secondly strange confrontation between UK & Iran in terms of capturing vessels.

I have 3 earnings report which will impact my portfolio as follows :

Wednesday

FB

TSLA

Friday pre market

TWTR

Thursday

GOOG

AMZN

IF we look @ bull bear ratio, it is also flashing warning....

Bulls   58.00%

Bears  16.8%

There is lot of optimism built in those numbers which may not bode well for the market.

Reaction to NFLX, MSFT has been more or less negative.

Friday we closed @ low of the day after opening higher, a reversal day which may have more downside.....

Rotation is happening even steels stocks are showing life.....

A safe strategy could be buying laggards or stocks which are showing new sign of life now....

We have made series of new all time highs recently, it may be time for TAPE to rest and may not reward good earnings report.

A safe strategy may be is to get out on the day of earning and not risk negative reaction, case in point MSFT....

I am quite concerned about this earning season, as we may hear more negative commentary going forward due to ongoing US China trade rift / duties...which is impacting Chinese domestic economy and US companies being hindered to do normal business transactions....

Considering all of the above, a pass on US market for now may not be a bad idea.....

Market needs clarity, there are too many issues hanging over this market.

Overbought may be the last thing this market can handle.....

Good luck with your own strategy and take on this market.

BLOG does NOT give buy or sell.

Saleem

Posted in: Mixed