Friday was a bit of a roller coaster for the indices. They opened higher after the jobs report was better than expected, but then turned sharply lower and all but the Dow were looking at pretty significant losses. In a reversal of Thursday’s action, stocks turned higher around midday and all four indices finished with significant gains.
The Russell led the way with a gain of 2.11% and it was followed by the S&P with a gain of 1.95%. The Dow moved up 1.85%, and after being down over 2.5%, the Nasdaq ended with a gain of 1.55%.
All 10 of the main sectors would finish with gains on Friday and only one failed to move up at least 1.0%. The lone group that failed to gain over 1.0% was the consumer discretionary sector and it gained 0.64%.
The top sector on the day was energy with a jump of 3.74%. The industrial sector gained 2.37% and the communication services sector rallied 2.34% as the second and third best performers. In all, six sectors gained at least 2.0%.
My scans were pretty neutral again on Friday with 32 bullish signals and 27 bearish signals.
The barometer fell quite a bit with the last two nightly scans being rather neutral. The final reading on Friday was 21.6, down from 39.9 on Thursday.
I have another bullish trade idea for you today and it is a second straight ETF trade. The iShares MSCI Hong Kong ETF (NYSE: EWH) got a bullish signal from my scans and it got a bullish signal from Tickeron, the AI platform I use. The Tickeron signal shows a confidence level of 85% for a move higher over the next month.
The chart shows a trend channel forming over the last four months and the EWH is right on the lower rail of the channel at this time. The stochastic indicators are in oversold territory and made a bullish crossover on Friday. We saw similar signals in early November, mid-December, and early February. All three of those signals preceded strong upward moves.
Buy to open the April 25-strike calls on EWH at $1.95 or better. These options expire on April 16, 2021. I suggest a target gain of 100% and that means the fund will need to reach $28.90. The fund peaked at $27.90 in February, but that was after an 11.5% gain. An 11.5% gain from the more recent low would mean a move to $29.36, well above our target. I suggest a stop at $25.50.
— Rick Pendergraft
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