Important economic data will land this week, and Wall Street is paying attention. When you look at the market as a whole, not accounting for capitalization weighting, stocks are neutral. Large caps are overextended and pushing indexes higher. I’ve identified the best short-term bearish trade for today’s market — and more in today’s stock market recap.
Stock Market Recap
Global markets are subdued as investors await the Federal Open Market Committee’s announcement on Wednesday, and the gross domestic product report on Thursday.
Google parent Alphabet, Apple and Microsoft report earnings today. We’ll see if positive earnings outweigh COVID-19 fears and the outcome of economic data this week. These reports are important because large caps are leading indexes to record levels. Only 53% of stocks in the S&P 500 are trading above their 50-day moving averages.
The market prices in everything that is known. And we know interest rates are probably going higher later this year, causing the bond market to move lower. The only situation that would likely change this is a wide-spread lockdown due to rising COVID-19 case numbers.
In today’s video, I also look at 90-day breakdowns. Try to avoid long-term, long positions. It’s probably better to be short on speculative stocks than long on large caps.
Roger’s Radar: Best Short-Term Bearish Trade for Today
My favorite short trade for today is a pharmaceutical company. Its stock peaked in February and has been hitting lower highs since then. Its one-year return is only 12% compared to the S&P 500’s 35% return. This is a good risk vs. reward trade, and low-hanging fruit.
In this video, you’ll learn the biggest risk to the market right now… the biggest opportunity for short-term traders… whether the Federal Reserve will change its timeline for raising interest rates… whether momentum levels in stocks are distorting price action… and the top short-term, bearish opportunity that offers low risk vs. reward.
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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.