Technical Strategy Video:

Stallout happening ahead of Jobs Number with multiple sectors near resistance

Key Takeaways

  • Trends remain bullish, but short-term overbought with indices and many sectors at/near key resistance near November highs, and/or trendline resistance
  • Healthcare the top performer of the week as Med Devices, Pharma kick into gear
  • Crude up against near-term resistance;  Meanwhile Bitcoin cycles under pressure

Thursday’s rally remains near prominent resistance at November peaks along with NASDAQ, while sectors like Technology, Healthcare, and others lie near key make-or—break levels just ahead of Friday’s economic data.  As seen below, Value Line’s Geometric Avg has rallied up to close the gap of its decline, and remains far weaker than SPX or NDX.   The next 1-2 days should set the tone for next week, but until resistance is properly exceeded, it’s still right to expect a further stallout here and possible reversal.  We expect trends for SPX will turn negative under 4612.

Stallout happening ahead of Jobs Number with multiple sectors near resistance
Source: Trading View

Cryptocurrencies haven’t been acting all that well lately, and 2022 early year cycles show the chance for downside volatility

Unfortunately, Bitcoin failed to live up to its seasonal time of strength in November/December (though three more weeks remain) But the decided lack of sufficient strength in recent days as Equities have rallied is a bit of a concern to Technical bulls.

Bottom line, regaining 53.3k is a must before thinking trends could be turning up, while 56k is a larger “line in the sand” for BTCUSD.  Meanwhile on the downside, under 47k would lead to a test of 42k in the days to come, and also a key figure.  Under 42k likely would lead to the low to mid-30’s technically and cannot be ruled out.

Weekly cycles on Bitcoin that concentrate specifically on 90 week, 42 weeks have proven very accurate over the years, giving us highs in late 2017 and also a runup into mid2019 and strength into this past Spring 2021 before fading into July, bottoming and running up into November.

Unfortunately these turn down sharply into May of 2022, so at least cyclically, it looks likely that the first half of 2022 could be “rough” for Crypto. Technicals had been supportive until last week, but are also slowly but surely starting to worsen.  BTCUSD will need to stabilize very quickly to give Bulls some hope and regaining 53.3k looks to be the first step.

Stallout happening ahead of Jobs Number with multiple sectors near resistance
Source:  Foundation for the Study of Cycles

Healthcare being led by Medical Devices–   Healthcare is now the strongest sector in the last five trading days, and much of this is due to strength being seen in stocks like EW, ALGN, COO, TFX, XRAY, DVA, and HSIC all up more than 6% on the week.  IHI, the ETF for the Ishares US Medical Devices ETF has key resistance near 65.  IF/when that area is exceeded, we’ll see much greater strength out of this group, but Med Devices, and Pharma are groups to overweight.

Stallout happening ahead of Jobs Number with multiple sectors near resistance
Source:  Trading View

For those focused on Energy, we’ve seen a good 2% snapback in XLE this week, and Crude oil is now up to challenge what will be its most important area of resistance for the month of December.  Given that seasonals remain negative for now, we’ll see if WTI can rise above 74.50, but the odds favor a pullback to retest into late December, so for now, it’s worth paying attention to this trendline.

Stallout happening ahead of Jobs Number with multiple sectors near resistance

Source:  Trading View

Disclosures (show)

Stay up to date with the latest articles and business updates. Subscribe to our newsletter

Articles Read 1/2

🎁 Unlock 1 extra article by joining our Community!

Stay up to date with the latest articles. You’ll even get special recommendations weekly.

Already have an account? Sign In

Don't Miss Out
First Month Free