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12/7/23 Sliding Sideways

News:

On Wednesday, markets opened green and declined throughout the session. 

The indexes all closed red. The losses were modest…

  • Dow Jones -0.2%
  • Nasdaq -0.6%
  • S&P 500 -0.4%
  • Russell 2000 -0.2%

There was no catalyst for the selling. Need a culprit? 

  • Overbought conditions are still present
  • December usually starts off on a weak note
Image from Adobe Stock

The current trend for the market is sideways.

But don’t worry … Late December is known for strong rallies. This is the time to buy.

Sector Round Up

4 of the 11 sectors ended Wednesday’s session with gains.

At the top…

  • Utilities (XLU) +1.3%
  • Industrials (XLI) +0.4%
  • Consumer Discretionary (XLY) +0.2%

At the bottom…

  • Financials (XLF) -0.5%
  • Technology (XLK) -0.9%
  • Energy (XLE) -1.5%

The energy sector is trading at its lowest level since July following the oil price slide.

Technicals: 

Overbought conditions persist in just 1 of the 4 major indexes—The Dow Jones

DIA Daily Candles – Chart from thinkorswim

But as you can see, the index is trading near 52-week highs and only a few ticks away from all-time highs.

Watch for a test of the market level before the rally continues.

Your latest readout…

Timing:

Next week, we’ll look for the phenomenon known as the January Effect to start.

Historically, from Mid-December thru February, small-cap stocks, tracked by the Russell 2000, outpace large caps, tracked by the Russell 1000, by 2-to-1.

Do with this information what you will. We remain long all major indexes.

Watchlist:

*Low Float
^Open Position

*DRCT support at $12
*CHSN on watch
*MYO support at $3.50, resistance at $4.50
HRTG support at $8.50, resistance at $9.50
AAOI support at $16
ALT support at $6
PRCH key level $2

Secondary watchlist—float about 100 million

BLUE support at $4, resistance at $5
AGRO support at $12
NMRK support at $8, resistance at $8.50
CLSK support at $8
^IOT support at $32, resistance at $35
GPS on watch
AFRM support at $35, resistance at $40
S support at $22
LYFT support at $12, resistance at $13
SID support at $3.35

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