The Week Ahead in Stocks – Feb 26

Stocks are delicately poised as we head into a new week. Again we will take our cue from leading stocks such as Amazon (AMZN), which made a new all time high last week before pulling back, and Netflix (NFLX), which made a perfect double top and is consolidating below.

Why are these leading stocks? Well apart from being the strongest, they are also barometers for the stock markets’ faith in the future. They are very good at signaling sentiment.

And as the ultimate growth stocks, they tell us yields are rising (in part) due to expectation of economic strength and growth. AMZN and 10 year yields rising together may appear healthy. But in 1987 NDX ultimately suffered worse when higher yields triggered the reversal.

A failed break-out in AMZN and NFLX would have implications for many stocks, and the stock market in general.

Over on our Hot Stocks section, we will look at more stocks which could benefit from increasing protectionism from Trump in the lead in to the mid-term elections. We will also look at some dividend stocks in light of the rise in yields.

Good luck and good trading.

Andrew McElroy
Chief Stocks Analyst
Matrixtrade.com