Trend bullish- Expect rally up to SPX 4415 and QQQ 375 without much resistance before minor stalllout but key area of concern, time-wise hits in late June/early July
Apologies but no video tonight as I am just returning home from a business trip to LA. I’ll provide some abbreviated comments below
Wednesday’s FOMC meeting provided little to no clarity in my non-economic view, as an FOMC pause in the rate hikes was followed up with very hawkish comments about a good likelihood of further hikes in the months ahead. Given that over half the FOMC expected at least two more hikes in the months to come while three voting members weighed in on three hikes, it’s difficult to understand why FOMC failed to hike rates on Wednesday.
While not an economist by trade, I do respect the comments of the Dartmouth professor David Blanchflower of the FOMC, who opined that 500 bps of rate hikes over 14 months would require quite some time before seeing the results.
Technically speaking, the early selloff was recouped yet again by the close, and markets have shown little to no evidence of price deterioration.
Importantly, DeMark exhaustion look to reflect at least another three weeks before weekly is possible that might result in a larger setback. At present, it’s expected that SPX reach 4415 and QQQ might reach 375 before a pullback gets underway.
Daily DeMark Symbolik charts of QQQ, shown below, look to be 4-5 days away from possible exhaustion. This could line up with a possible near-term peak early next week. However, the larger peak likely won’t occur time-wise until late June to early July. I’ll fine tune this within a few weeks as it gets closer.
At present, stocks like AAPL have broken out and show little to no evidence of peaking. Rather, upside looks likely up to $190 and potentially to $197 before any resistance takes hold.
Copper rally looks to be underway
Copper’s push back above $3.85 successfully recouped the former lows from April 2023 and price has pushed right back into the former consolidation that had been broken.
This gain directly coincided with a PBOC rate cut, and there remains speculation that China’s central bank will begin a round of stimulus in the days/weeks to come.
Copper’s gains likely would accelerate in the event that stimulus is added by the PBOC, and Wednesday’s gains add conviction to the idea that Copper is turning higher sharply.
At present, Copper likely rallies up to $4.07, but I expect a much larger rally that reaches March 2022 highs at $5.00.
Healthcare Services decline doesn’t look to serious in many names
Healthcare Services sold off sharply Wednesday following a very sharp period of gains in early June.
Technically speaking, Biotechnology and Healthcare Services have both made good progress in recent weeks.
Importantly, charts of the SPDR S&P Healthcare Services ETF broke out of a 9-month downtrend earlier this month. However, the larger downtrend from 2021 will require a move back over $95 to have conviction that a larger rally is underway.
Stocks like HUM 0.26% did violate near-term support. However, the larger structure is intact for Humana. Similarly, stocks like CI 0.73% and UNH 0.14% also faltered on Wednesday. In both of these latter cases, pullbacks do not seem serious enough to warrant avoiding and/or hedging long exposure.
Healthcare as a sector looks to have one to two more weeks of possible consolidation before this begins to bottom out vs. Equal-weighted S&P 500 in relative terms, based on DeMark exhaustion. Overall, it looks right to favor Healthcare bottoming in the near future, and recent consolidation does not appear too serious.
