- Dow Jones Industrial Average (DJIA) futures climbed cautiously higher, pointing to a record open.
- Trader sentiment was boosted by news that a phase one trade agreement is “imminent”.
- But Canaccord Genuity warned investors not to “FOMO” into an overheated market.
Dow Jones Industrial Average (DJIA) futures point to another record open on the stock market on Wednesday. Traders are hitting the ‘buy’ button hard as Trump proclaimed that US-China trade negotiations had reached the “final throes.”
Does that mean traders should jump on the bandwagon and buy stocks?
“The short answer is no” – Canaccord Genuity analysts.
The investment firm, with $31 billion assets under management (AUM) cautioned investors not to get carried away and ‘fomo’ into the latest rally. Despite record highs, the firm’s indicators are flashing oversold signals.
“While anything can happen, our indicators simply favor not chasing the market higher on fear of missing out (FOMO).”
Dow futures point to all-time highs at open
Long-term bullish, short-term cautious
Canaccord was quick to point out the firm’s long-term investment thesis hasn’t changed. They see the stock market extending all-time highs into 2020, but now isn’t the right time to enter the market.
The perfect moment to buy was six weeks ago, when sentiment was negative and stocks took a deep tumble. Buy when there’s blood in the streets, as the old saying goes. But now?
“The opposite appears true today. The markets are printing records, the bears are waffling, the bulls are competing over who has the higher target, and the VIX has dropped to under…