Stocks Trade In Narrow Range, Within Striking Distance Of All-Time Highs

Stocks ended modestly lower yesterday with the market trading within a relatively narrow range all week.

We'll see how that range holds up today. (Markets are closed tomorrow so today is the end of the trading week.)

Either way, the market looks poised for an upside breakout. Whether that's today, or next week, or a couple of weeks from now, it sure looks like it's coming.

With an excellent economy, the best jobs market ever, low inflation, low interest rates, record corporate profits, and an historic U.S-China trade deal (potentially) in the near offing, stocks look ready to soar.

While earnings season could very well be the catalyst for an upside breakout (it's off to a great start), a U.S.-China trade deal will likely be the biggest driver, once we get it (assuming we do).

The market was assuming we'd see that within the next 3 weeks, given previous comments by the WH. But reports yesterday that a U.S. trade delegation is headed back to Beijing the week of April 29th, with a Chinese delegation then heading to the U.S. afterwards for the week of May 6th, pushes the timeline out a little further.

The market continues to be patient. (A sweeping agreement between the two largest economies in the world isn't easy.) But since both parties seem intent on wanting to forge an equitable and lasting deal, the market is rightfully giving them time.

In the meantime, earnings season is the main focus. And since earnings season is typically a good time for stocks (in the last 10 years since this bull market began, stocks have gone up on average of 2% during earnings season), you can see why traders are enthusiastic.

We all know how stocks can soar if they positively surprise. In fact, it's not uncommon to see stocks surge 10%, 15%, or even 20% or more in one day on a fantastic report.

The key is getting into the right stocks.

If you want to learn how to find potentially big winners this earnings season BEFORE they report, I encourage you to read our latest commentary...

How to Find Big Winners This Earnings Season

Best,

Kevin Matras

Executive Vice President, Zacks Investment Research

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