The stock market is stable according to the put/call ratio and volatility measures. However, the majority of the stocks showing gains of late are large caps. I expect choppiness to continue and volatility to increase in the near term. Economic reports continue throughout the week and could move markets, so I’ve picked one global ETF to buy and one stock to short to play current conditions — and more in our stock market recap.
Stock Market Recap
In Tuesday’s stock market recap, global stocks are mostly higher after U.S. markets rallied Monday morning.
Existing home sales came in better than expected on Monday. New home sales rebounded in July and the medium home price set a new record high of $390,500. Durable goods orders are scheduled to be released on Wednesday. Federal Reserve data also continues to pour in as investors eye Thursday’s gross domestic product report.
The bond market is being impacted the most by this week’s Fed data. I expect the bond market to cool off as we repeatedly get confirmation of an expanding market and a future need for stimulus tapering. If the delta variant hadn’t spread as it has, we could’ve seen more action by the Fed to taper back its bond-purchasing activity.
If we take away market capitalization, stocks have been choppy and trading mostly flat. Good indicators for current momentum levels are the stocks making 90-day highs and lows. Only 14 stocks are breaking down while 127 are breaking out. We typically want to see more than 200 names making 90-day breakouts.
Roger’s Radar: 1 ETF to Buy and 1 Stock to Short
908 Devices Inc. (NYSE: MASS) makes products for chemical and biomolecular analysis. It’s been on a downward trend for the past six months and recently bounced to its 50-day moving average. MASS has fallen32.29% the past year and I would short it at its current $34 level, covering at around $28.
There are opportunities to trade outside of U.S. markets. There’s a competitive edge to today’s second pick because not a lot of traders are looking at global ETFs. It’s a Saudi Arabian ETF and its option prices are attractive right now.
In Tuesday’s video, you’ll learn which way markets are headed… why bonds are set to drop… an update on momentum levels… the top global ETF to buy… and the weakest stock to sell.
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Check back each morning for Roger’s Radar and the most important news and numbers in the WealthPress stock market recap.