Indexes Show Signs Of Accumulation With A Major Low Likely In Place
The major indexes gapped up on November 14 on better than expected CPI numbers.
This is a very positive sign for stocks as it indicates that further rate hikes are unlikely. When we look at the daily charts of the S&P 500, Nasdaq Composite, and Russell 2000 we can see a shift towards accumulation has taken place and that the market is showing a change of character.
After showing supportive action near the 200-day moving average earlier this month, both the S&P 500 and Nasdaq now look to be forming the right sides of large bases. I still believe the 1990 vs 2022 comparison still holds some credibility. If that scenario continues to play out, a strong uptrending market may not be too far away. In addition, seasonality is also playing into the bulls' favor as the November, December, and January months are usually one of the stronger periods for the market.
Beneath the surface, New Highs-New Lows is starting to improve. The extreme reading in October most likely flushed out the remaining weak hands. We can also see this on display when looking at a chart of the put/call ratio.
Individual stocks still haven't begun to move with the momentum I'd like to see, but we are definitely starting to see constructive action. NVDA, PLTR, MDB, COIN, SMCI, MNDY, and NET are some of the names I'm keeping on my watchlist to see if they can set up potential buy points.
Crypto
Crypto is clearly in a new bull market. Major buying has come into Bitcoin and Ether over the last few months. Solana has also been acting extremely well.
Risk right. Sit tight.
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Full Disclosure: I currently own SPY, QQQ, Bitcoin, and Ether.
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