Charles Green here, Senior Market Analyst here at Traders Agency.
Here’s today Market Pulse 360.
Market Pulse 360 for August 18, 2023
Markets are struggling over the past two weeks and may not make up much ground for the next two weeks.
The 10-year Treasury yield above 4% is kryptonite for the market, and it will cause weakness in the market as long as it remains above or near 4%.
The good news was that we are approaching a major resistance level of 4.25% on the 10-year bond yield, which happens to be the high mark of last year in October. Bonds compete with stocks, and when the bond rate goes up, institutional money rotates from stocks to bonds.
This does not mean the move in the 10-year yield is the right move. In fact, bond holders have been wrong for most of the year, until recently, by betting on bonds when stocks were the best game in town.
With the Fed back in play next week at the Jackson Hole economic summit, August being a seasonally slow period for stocks, and the bears coming back out of hibernation for a last stand, caution is warranted.
Keep in mind, the markets fought through the bear camp, a bank scare, greater uncertainty about interest rate hikes, disappointing corporate earnings, worries about a stock market crash, and some expectations of severe recession last year, which posed significant headwinds to get to where it is now.
The uptrend in the market is no fluke. We are in a much, much better place than we were a year ago, and this is what the market was telling us with the best first-half of the year in the stock market since 1983.
The other worries are just cuckoo, but causing markets to dip below the 50-day moving average.
In the meantime, caution is warranted short-term and patience is required. Nothing has fundamentally changed with the longer-term direction of the market, but we have done some short-term technical damage that must be overcome to resume the uptrend. Time is on your side!
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A Bit More About Me
My specialty is understanding financial markets and the drivers that influence longer-term direction. I’ve been an active trader focusing primarily on stocks for over 20 years.
I’ve also:
- Been an adjunct finance professor for nearly 20 years
- Worked as a financial consultant with Merrill Lynch managing millions of dollars
- Earned a Master of Science Degree in International Business and Finance from Georgetown University and a Bachelor in Arts Degree in International Studies from George Mason University.
- Spent 14 years as a Marine (I enlisted at age 17) traveling all around the world
My education, work and life experience gives me a broad view of the world, financial markets, and life in general that informs my trading and investment decisions.
My passion is helping others to take advantage of the best market opportunities to achieve their financial goals.
This gives me the greatest satisfaction, and it’s the reason why I continue to teach in the classroom and outside of it today with every activity in which I engage. I believe that I succeed only if clients succeed.
I am a very unlikely success story. And this is only because I believe that anything is possible with the right knowledge, focus, and winning mentality! When you have that, success is just a matter of time.
Charles Green
Senior Market Analyst, Traders Agency
