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2 Short Plays and What to Make of the Fed, Thursday’s GDP Data

by | Aug 26, 2021 | Uncategorized

The U.S. economy continued to grow during the second quarter of 2021. While this is good news, it could be additional evidence that the economy is growing at a faster rate than expected. With a potential change in the Federal Reserve’s bond-purchasing program and the choppy market action we’ve seen lately, it may be a good time to short stocks. So I’ve identified two stocks that could continue breaking down in the next few days — and more in our stock market recap.

But first…

Stock Market Recap

In Thursday’s stock market recap, global stocks are mostly lower as investors analyze what the second-quarter gross domestic product could mean for stocks.

U.S. gross domestic product for the second quarter came in at 6.6%, in line with analysts’ estimate. This shows strong economic growth and plays into the idea that the U.S. economy is growing. 

But keep your eye on the bond market. Bonds could drop if investors believe the Fed will taper its bond-purchasing program in the near term. 

S&P 500 sectors are showing fragmentation. The market continues to be subdued according to stocks making 90-day breakouts and breakdowns. Potential bond tapering by the Fed could break us out of the choppiness we’ve seen and give us a directional bias. 

The Fed’s annual convention in Jackson Hole, Wyoming started on Thursday. Chair Jerome Powell is scheduled to speak on Friday. 

Roger’s Radar: 2 Weak Stocks Breaking Down

Trupanion Inc. (Nasdaq: TRUP) is a pet insurance company. People have spent less on their pets because they aren’t staying home as much. TRUP has made two lower highs, traded below its 200-day moving average and bounced back up. It’s the same way I trade pullbacks, but to the downside. I expect TRUP to break down even further. 

The second stock breaking down is a leading global producer, designer and supplier of engineered aerospace components, systems and subsystems. Similar to TRUP, this stock has bounced back to its 200-day MA and could continue trading lower. 

In this video, you’ll learn why markets are super vulnerable at this time… why Thursday’s Fed data is crucial for markets… which sector is bullish and which is bearish… whether market momentum levels are overstretched… and two stocks to sell right now.

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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.

WRITTEN BY<br>Roger Scott

Roger Scott

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