Five Hurdles Cleared: Is a Market Rally Here to Stay?
Markets Gapped Higher, Leaving Vulnerability Behind: Be Prepared for Potential Reversals. Trade Safe and Have a Roadmap for Next Week.
Last week, five factors were identified as crucial milestones for a sustainable rally:
SPX holding above $5061
Breaking resistance at $5110 for SPX
VIX falling below 14.8
Nasdaq 100 staying above $17609
Dow Jones Industrial Average (DJI) consolidating at 38371
Remarkably, all five conditions were met during the week, though not without volatility. Friday's surge brought these elements back into play, but it also left behind a significant gap and a clash between all major indexes and their 50-day moving averages.
Here are some market considerations based on last weekend's edition:
Dollar Index (DXY): Fell as expected.
Treasury Bonds (TLT): Bounced as anticipated.
Russell 2000 (IWM): Found support at the confluence zone identified earlier and bounced.
Alphabet (GOOG): Declined as the daily Bollinger Bands suggested, but also found support at the anticipated $167 S/R level mentioned on Monday’s special update.
Microsoft (MSFT): Confirmed a bottom, as explicitly mentioned despite its gap opened; it was closed rapidly and price bounced.
Apple (AAPL): Recovered its annual S/R level, avoiding the $144 scenario.
$173 became support for Tesla (TSLA), increasing the chances of a sustainable rally (crucial level to watch below).
Meta Platforms (META) and NVIDIA (NVDA): Continue building price at their current bases. Mention the key level for META that could trigger a down move (below).
Gold (GDX) and Crude Oil: Both experienced significant declines, aligning with the possibility anticipated despite last week's rally.
Bitcoin: Price fell and found support at the 20-week moving average, as predicted. My updated technical analysis for Bitcoin is below.
European Indexes: Closed near key S/R levels. My take on the latest price action is below.
SPX comes from extreme overbought levels, a special study of overextensions was published, it breaks down technical indicators to consider in order to navigate the current pullback and provides references of what is coming after the bounce that will follow this decline. This is a must read.
This publication you’re reading provides a broad market perspective, many contents around there are based on SPX alone, this content includes more than 30 charts with weekly and monthly perspective for U.S. Indexes, The Seven Tech Giants, Bitcoin, GDX, Silver, CL_F, European Indexes, NIFTY, breadth and market references. Subscribe and get access now.
The Five Checkpoints Were Accomplished, Is Everything Ready For All Time Highs?
The market finds the way to add uncertainty. Everything was achieved based on a bad economic news (non farm payrolls on Friday AM), indexes roared way above the levels related to AAPL’s earnings, bad news were good news for the market based on the speculation of rate-cuts, that usually is not sustainable, and in addition to the gap ups, there are some weak market references to watch with precaution. See them below, this will help you out to navigate potential turbulence next week: