The Dow, Nasdaq, and S&P 500 all have a sidelines rating. The Russell 2000 is in a downtrend. My prediction for trading next week is that the Bears have the advantage over Bulls.
Stock Market Forecast April 2014
April “Best Month” for Dow since 1950;
Day-before-Good Friday gains are nifty.
Stock Market Prediction Algorithm
The stock market prediction algorithm is doing well for us. In this tough trading market where Friday closed at 1857 on the S&P 500, just 7 points above where it close on January 1st 2014, I think the stock market algorithm is doing good.
Major moves are taking place on the international stage which can become harmful to the U.S dollar and stock market. The escalation with Russia over Ukraine was a disaster after the U.S. was caught using a false flag (claiming ousted President Viktor Yanukovich ordered the shooting of protestors), and financially supporting regime change in Ukraine. Then strong U.S. ally Turkey blocked Twitter and YouTube after a conversation was released over these social networks that showed high level Turkey leaders discussing using a false flag in order to start war with Syria.
The value of the U.S. brand around the world is dropping fast. More and more countries are sick and tired of the U.S. financing chaos, violence, and death in countries in the name of regime change. Therefore, the move to dump the U.S. dollar as the world’s reserve currency is picking up speed. President Obama and democrats are continuing the disastrous foreign policy of regime change that was also supported by George Bush and republicans.
Finally, we have the credit bubble in China finally popping as evidenced by the collapse of the Chinese real-estate market. This alone could put the U.S. into a Bear market.
All of this drama is happening as we enter the last month in the best 6 months of the year.
Stock Market Prediction 2014
The stock market prediction for 2014 is still down. The U.S. government, Federal Reserve, and big money managers and hedge funds have hit the mainstream media saying that the U.S. economy is going to have a big 2nd quarter improvement and will continue to strengthen through the second half of the year. I see little reason to trump the January Barometer which signaled stocks will close down for the year in 2014 (the January Barometer is right 75% of the time). The Employment Situation report coming out next Friday, April 4th, 2014, for the month of February is going to be critical in determining the future direction of the market. We will finally know if the economy slowing down really was caused by colder weather.
The Aries Sun and Stock Market Prediction
With the Sun in Aries over the next few weeks, the probability of war breaking out runs high. War usually results in a sell off on Wall Street so make sure you limit your market exposure. For example, try to close out your trades by the end of the day and certainly by the end of the week so you do not hold any positions over the weekend news cycle.
The major fundamental analysis reports of last week were: Tuesday’s New Home Sales, Wednesday’s Durable Goods Orders, Thursday’s GDP and Jobless Claims, and Friday’s Personal Income and Outlays.
New home sales in February came in at an annual rate of 440,000, below the 445,000 that was expected. The 440,000 number was the lowest number since September 2013. The Census Bureau quietly lowered January’s new home sales from 468,000 to 455,000.
Durable Goods Orders only rose 0.2% year over year. It had a sequential month over month increase of 2.2%, thanks to defense and non-defense aircraft orders, which jumped by 21.1% and 13.6% in February.
The Q4 GDP started at 3.22% in the first forecast, dropped to 2.38% in the second, and finally came in at 2.63%. The 2.63% GDP in Q4 is a negative surprise coming in below the expected 2.7%. This is a HUGE drop from the Q3 GDP of 4.1%! We now know that the 4.1% Q3 GDP was due to record inventory build up.
Jobless claims continue to come down signaling very slow improvement in the labor market. Initial claims fell 10,000 in the March 22 week to 311,000.
Personal income advanced 0.3%, which was expected by economists after the “polar vortex” winter. The important wages and salaries component grew 0.2%, following a 0.3% increase the month before.
The fundamental analysis reports with the greatest probability of moving markets next week are:
Tuesday, Apr 1 = ISM Mfg Index
Thursday, Apr 3 = International Trade, Jobless Claims
Friday, Apr 4 = Employment Situation