Stock Market Forecast for the Week Ahead: The Summer Doldrums Approach
Stock Market Forecast for the Week Ahead: The Summer Doldrums Approach
By:Peter Hanks
Stock Market Forecast for the Week Ahead: Neutral
· The Dow Jones, Nasdaq 100 and S&P 500 will negotiate the Fed’s taper debate
· Non-farm payroll data will likely be the largest scheduled event risk in the week ahead
· Stock Market Seasonality: Should you sell in May and Go Away?
Stock Market Forecast for the Week Ahead: The Summer Doldrums Approach
The Dow Jones, Nasdaq 100 and S&P 500 enjoyed modest gains last week as the three indices advanced roughly 1.1%, 2.3% and 1.3% respectively. Inflationary concerns and talk of the Fed’s monetary policy reaction drove much of the price action and were the suspected catalysts behind initial price movement on Monday and Tuesday. As the week progressed volume and volatility died down and the major indices maintained a tight trading range into the weekend.
Stock Market Liquidity and the Benefits for Traders
That being said, the market behavior experienced late last week may be a sign of what’s to come for the Dow Jones, Nasdaq 100 and S&P 500 as seasonal headwinds work to weigh on market activity. Already, daily trading volume on the major US indices dipped to some of the lowest levels in the year-to-date last week and as summer approaches, the trend may continue until September.
Sluggish market activity can lead to failed breaks with little follow-through which, in turn, can make trading ranges more common presenting an ideal landscape for range trading strategies. That said, the market should continue to derive influence from the same fundamental themes, inflation and taper talk, which will make Friday’s non-farm payroll report a highly important market event as market participants attempt to gauge precisely when the Fed will look to shift its policy path.
Fed Chairman Jerome Powell has repeatedly stated any change would be communicated well in advance which has led investors to suspect recent remarks from some Fed officials could be the start of said communication. Crucially, there has been no official statement and the next opportunity to provide such a shift may present itself at the June FOMC meeting when a new Summary of Economic Projections (SEP) is released.
In the meantime, markets may grasp for direction as liquidity and volatility look set to dry up. Follow @PeterHanksFX on Twitter for updates and analysis.
Written by Peter Hanks, Strategist for DailyFX.com
Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.
tastylive content is created, produced, and provided solely by tastylive, Inc. (“tastylive”) and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. tastylive is not in the business of transacting securities trades, nor does it direct client commodity accounts or give commodity trading advice tailored to any particular client’s situation or investment objectives. Supporting documentation for any claims (including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer. Options, futures, and futures options are not suitable for all investors. Prior to trading securities, options, futures, or futures options, please read the applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange-Traded Options Risk Disclosure found on tastytrade.com/disclosures.
tastytrade, Inc. ("tastytrade”) is a registered broker-dealer and member of FINRA, NFA, and SIPC. tastytrade was previously known as tastyworks, Inc. (“tastyworks”). tastytrade offers self-directed brokerage accounts to its customers. tastytrade does not give financial or trading advice, nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of tastytrade’s systems, services or products. tastytrade is a wholly-owned subsidiary of tastylive, Inc.
tastytrade has entered into a Marketing Agreement with tastylive (“Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’s brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade. tastytrade and Marketing Agent are separate entities with their own products and services. tastylive is the parent company of tastytrade.
tastycrypto is provided solely by tasty Software Solutions, LLC. tasty Software Solutions, LLC is a separate but affiliate company of tastylive, Inc. Neither tastylive nor any of its affiliates are responsible for the products or services provided by tasty Software Solutions, LLC. Cryptocurrency trading is not suitable for all investors due to the number of risks involved. The value of any cryptocurrency, including digital assets pegged to fiat currency, commodities, or any other asset, may go to zero.
© copyright 2013 - 2024 tastylive, Inc. All Rights Reserved. Applicable portions of the Terms of Use on tastylive.com apply. Reproduction, adaptation, distribution, public display, exhibition for profit, or storage in any electronic storage media in whole or in part is prohibited under penalty of law, provided that you may download tastylive’s podcasts as necessary to view for personal use. tastylive was previously known as tastytrade, Inc. tastylive is a trademark/servicemark owned by tastylive, Inc.