Hello! Here’s what’s happening in the market today…
News:
January’s first five days of trading ended in the red. Historically just 56% of years that begin with a red week end in the green. So it’s a coinflip at best…
The market did give us a bullish signal with the “Santa Rally.” But when dealing with the uncertainty of the market I like to see signals align before placing big bets.
Bonds and Bitcoin continue to sink. News headlines continue to call for a crash…
As much as I think we’re due for a big shakeup I don’t see that happening right now. Traditionally bonds rise when stocks fall. Since bonds are slipping I’m not concerned about a crash…
Just don’t forget sideways is a direction. The market doesn’t always move up or down.
Bitcoin can help measure the risk tolerance of the market. While it’s slipping I tend to make more conservative bets.
This week marks the beginning of earning season. How the market reacts to the latest numbers could start to establish the direction of the market. Banks start reporting on Friday. I’m looking for other clues in the meantime…
Technicals:
The indexes look like they’re trying to bottom. But all have failed to reach a major support level. So I’m not convinced buyers are ready to get aggressive just yet.
But I like what I’m seeing from my indicators. They agree…
The VIX is holding in the high teens. (Bullish)
The put-to-call ratio is near oversold. (Bullish)
RSI readings are nearing oversold. (Bullish)
I don’t believe there is much short-term downside left. But the market could move sideways for the next few days or weeks…
Timing:
The month of January correctly signals the direction of the market for the year with 73% accuracy. When February starts we should have a better outlook for the year ahead.
January is historically the best month for the Nasdaq which is also closest to support.
I’m considering a leveraged bullish bet if the Nasdaq reaches a critical support level. I will buy TQQQ if I make the bet. But I’m not ready to buy just yet. Stay tuned!
Today I’m generally bullish but risk-off.
Watchlist:
*CELZ has resistance at $4
*HOUR is on watch
*HGSH has support at $2.50
ESTE has support at $13
LQDA has resistance at $6.50
ASRT has support at $2
DISCA has support at $29
F has support at $22, resistance at $25