At the end of last week, Chris Ciovacco recorded his weekly “Short-Takes” market analysis, and overall, things looked quite bullish. Most markets were above their moving averages, trends were rising, and things looked good. And then this week, markets turned down, and things got gloomier. But as we’ve said before, Stocks Don’t Go Straight Up (or Straight Down), and Chris said last week that he wouldn’t be surprised to see the markets like the S&P 500 retest the 3900-3950 levels. This is all part of a healthy consolidation. Of course, if markets fall below certain levels, we must reevaluate our position and see if the 2023 rally was just a “Bull Trap” after all. We should remember that the FED is still tightening, and we know “fighting the FED” is generally a bad idea.
If you want to listen to Chris’ analysis from last week it is here:
Some Quotes from Chris:
- The longer the S&P 500 stays below 3900 the more concerning it would become.
- Global Stocks (excluding US Stocks) are above their moving average and previous resistance is now acting as support.
- European Stocks have all 5 of Ciovacco’s indicators looking positive.
- Bonds are above their trendline which could act as support.
- Mid-Caps are above trendlines and support and holding it.
- Even a significant move down could still be part of a longer-term bull market.
- Small caps are consolidating above their moving averages.
- QQQ is trying to make a stand above 260.
- When the 200-day moving average of the S&P 500 High Beta stocks turns up, typically good things happen in the market.
- Foreign Markets are looking less and less like a bear.
- Inflation/rates/ FED are still major wild cards.
- Probability is leaning towards good things happening.
- Weight of the evidence supports a new bull market.
- Keep an open mind about a wide range of outcomes… Despite the bullish look, it still possible that these markets could fall.
- So far, so good, but hurdles still to overcome.
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