We have been monitoring this long, sideways range on the S&P 500. After first probing through the top of the range, the SPX found support on the 89-week SMA and catapulted itself higher, overshooting the rising wedge that had begun to form:
Read more “The Weekend Review of the Markets: Have the Bears Got the Bulls Right Where They Want Them?”
In this weekend’s technical analysis review of the stock market, I will examine the question of whether or not we are still in a bear market. Over these last few weeks, I have been inclined toward the bearish case, but we’ve since seen accelerating strength in a very few places, and this has caused particularly the Nasdaq to squirt so high so fast that we might be inclined to doubt the bearish view altogether.
But despite that strength in the Nasdaq—driven mostly by the semi-conductor sector alone—I still don’t see a lot of evidence to wholeheartedly accept a bullish view here. We will look at some U.S. indices, we will look at breadth, volatility, and we will include an assessment of where I think we might go from here.
Despite the AI-gasm, the S&P 500 closed a mere 15 points above where it closed last weekend. And so in that respect, nothing here has changed a whole lot. We’re still in and around this sideways range that we’ve been in for weeks and weeks:
Read more “The Weekend Review of the Markets: Are We Still in a Bear Market?”
Good evening, traders.
So a few important things have happened today.
Read more “Market Update for Tuesday, May 23rd, 2023”
Good afternoon traders.
After poking above this long, sideways consolidation last week, the S&P has made a small consolidation:
Read more “Market Update for Monday, May 22nd, 2023”
In this weekend’s review of the stock market, I will discuss both the bearish and bullish cases. An excellent case can be made for the bears. However, that case depends upon them showing up in force, which they have not yet done. And that does leave an opportunity for the bulls. So if we’re objective, and open to alternatives, we stand a better chance of participating profitably in the market. To that end, I will examine both sides today.
The basic view that seems most reasonable is that we just endured the fastest rate hiking cycle in history, and that the effects of that have not yet been fully felt by the economy, and so have not yet been priced in by the markets. And historically, hiking cycles often do work this way: the Fed hikes until they break something, then they pause and/or pivot, which signals that something broke, then the markets often enter the steepest, recessionary decline of a bear market.
We’ve already had a period of hiking, we then have had several banks fail, and so this pattern seems to be unfolding before our very eyes. So it would make sense if the rest of this scenario played out and we might then see the steepest, recessionary decline of a bear market. And to make matters even worse, we also now face the threat of a U.S. Treasury default, and who knows what something like that might do—if it happens. So from a story-telling point of view, the bear case is almost irresistible. Be that as it may, some stocks have performed really well lately, despite these headwinds, and since we can’t trade stories, and we must trade prices, we will also look at the bullish case as well.
The Bearish Case
The S&P 500 has been trading in a sideways range for weeks. In this last week, it’s managed to poke through the top of that range, and has even managed to close over the 89-week SMA:
Read more “The Weekend Review of the Markets: Who Will Win the Great Bull/Bear Deathmatch?”