Posted on 02/23/2024 4:56:53 PM PST by Eccl 10:2
Vital signs still OK? Don’t know how to read this chart.
RSI peaked and is showing negative divergence.
MACD heading toward a bearish crossover.
Stochastics pointing to a bearish downturn.
Please ping me if you want to be added to the list, but…
NOTE: For discussion purposes only. I am not any sort of financial or investment professional, and I take no responsibility for any actions taken by you, nor does FreeRepublic.com.
My best guess is that QQQ is a little overbought, short-term.
Personally, I believe the markets are close to peaky-peaked out, but I don’t see them falling off a cliff in the immediate future.
I thought it was incredible how the PANW earnings reaction smoked 100 points out of the /ES and it came right back with NVDA earnings. IMO, this is a big FOMO market. Not big fat——big thin. Remarkable. Catalysts going forward? Ehhhh...?
I would take or protect some.
Incidentally, I have not checked this but my sense is that the rally since October is possibly one of the top 5 rallies of all time. If not in the top 5, it’s still huge.
Consumers are running out of discretionary income and carrying more debt. Not conducive to continuing market strength IMO.
“Is this latest push up past its due date?”
Maybe. I like what I own, just watching the show and fine tuning.
“Stochastics pointing to a bearish downturn.”
Agreed. And I’m positioning myself accordingly.
This week has been crazy indeed! But wait! There is more!
In addition to economic data coming out next week, we also have more earnings reports. For instance Berkshire Hathaway’s earnings report is due tomorrow. Then on Tuesday there is Lowe’s and some other retail reporting. That is in addition to some financial institutions such as Royal Bank of Canada on Wednesday. Earnings surprises and “unexpected” economic data can move the market in major ways.
Also, I believe the media is falsely promoting a narrative of a strong U.S. economy. I think they are fudging the numbers and eventually the straw house will start to collapse upon itself. (Just my 2c’s worth and not financial advice)
“For instance Berkshire Hathaway’s earnings report is due tomorrow. “
I can’t see how BRK.A can do all that well right now. Huge stake in AAPL which is going nowhere. Huge % of assets in cash with little return. We’ll see.
“my sense is that the rally since October is possibly one of the top 5 rallies of all time”
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Agreed, and I believe it’s running out of steam in the ST. It will almost certainly be higher by November, but there will be some tradeable swings in the meantime.
“Consumers are running out of discretionary income and carrying more debt
I’m not sure that is probative to market action. I do not believe (and it’s only my belief) that the market is responsive to consumer “flushness”. It’s probably “a” factor but certainly not the only factor and I myself don’t think it’s even in the top 5 factors. I think there is a tremendous “wall of worry” going on with worldwide events. There are few other investment options. I think there is huge Chinese money pouring into our markets, possibly taking a break from jacking real estate to da moon. There is subliminal hope that the Fed will cease raising rates and might even reverse. I think that’s a fantasy. And finally, there is almost as much frenzy about AI as there was in the whole internet.
I don’t know and don’t pretend to know how long it lasts, but I know it has come hella long way since the end of 2023. My opinion is to judiciously take some off. I have a friend, vastly wealthier than I am, with whom I act as a mild advisor. We got him into SPYders at 305 a couple of years ago. Now it’s 507. That’s 200 freaking points. He doesn’t respond when I ask if he’s ever considered selling it/some. To be sure, I’ve suggested him selling some plenty lower. Ass had made superior decision to brain, a not uncommon turn of events.
You hit a lot of the points that seem to roll around in my head ..
wall of worry
Chinese money
the Fed
frenzy about AI
It helps me to get my focus when I see these things articulated clearly like that.
I appreciate it much.
Looking forward to more form you
thanks
” 440 qqq call wall rejection and NVDA 800 call wall. “
“March opex. “
“a barcode situation”
An interesting post ...
could you expound on it a bit
maybe break it down in way that even a simple minded old man like me can get my head around.
thanks ...
A ton of variables effect the market and they interact in infinite ways. You touched on a few of them. That said, we are a consumer driven economy. As is well known, consumption spending makes up two-thirds of the U.S. economy on average, so as the U.S. consumer goes, so goes the U.S. economy. So if consumption slows down in a significant way, so will corporate earnings.
The consumer is struggling to keep up with the rising costs of necessities, thereby leaving less and less in the way of discretionary income to spend. I’m hearing this from everyone I know. And as I said, debt is rising across the board.
The combined effects of inflation and debt just seems like a major risk to the market IMHO. Notwithstanding the happy economic numbers being produced by the government (often revised down) we are already seeing lots of corporate layoffs occurring and that seems to signal some concern on their part of a slowdown.
It has been a remarkable run up in the markets. I’ve had some regrets about not being more aggressive, but then again its good to sleep well at night and stay true to one’s long term strategy.
Best of luck to you.
If you look at option flow, the market is in a steady drift up, do to the constant factor of algos buying. That's why it takes certain shocks to create bear events.
As of now, the market looks toward a 5200 spx level, everyday market makers buy and sell stock to get to those levels. Certain factors allow market makers to have profit daily and end the day 'neutral'. Neutral, simply means their contracts create the most advantages to them overnight and end of day. NVDA play was under 800, the QQQs was under 440. Going forward, we have to see if options are rolled higher, which creates drift upward to reach those 'neutral' levels again. March OPex[options expiration] is a huge deal because its a quarterly expiration event, and post earnings.
Do you watch the “roll”?
Would you drop me a clue once in a while as to your take on the movement?
good insight there ...thanks
The rolls happen often, but more so on the these large monthly option experations, say if NVDA has more option flow at 1000, thats a clue the price will drift in that direction. Not always true though, externalities can knee cap individual stocks and the market.
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