Technology saves the day again Array ( [cookie] => e4b261-9895af-373efe-30ba37-864716 [current_usage] => 2 [max_usage] => 2 [current_usage_crypto] => 2 [max_usage_crypto] => 2 [lock] => 1 [message] => [error] => [active_member] => 0 [subscriber] => 0 [role] => [visitor_id] => 206905 [user_id] => [reason] => [method] => ) 1 and can accesss
Near-term and intermediate-term technical trends remain bullish for US Equities, but momentum remains under pressure in the near-term, given the recent stalling out into this week’s FOMC meeting. The combination of overbought conditions coupled with a completion of DeMark-based exhaustion signals on daily charts for QQQ could still allow for some selling pressure in my view (or at a minimum, choppy trading) over the next 1-2 weeks. I don’t find the near-term risk/reward appealing this week with SPX over 6600, but SPX could very well reach 6725. Market breadth has declined in the short run (last two weeks), but Thursday’s recovery still hasn’t allowed for any technical breakdown of the most recent uptrend since early September. Given how stretched SPX has become lately, I feel that any daily close under Wednesday’s lows (9/17) (SPX 6551) should result in 3-5 days of weakness. At present, DXY and Treasury yields remain downward sloping, but have bounced a bit after this week’s FOMC rate cut. Precious and industrial metals remain attractive and lie in short-term uptrends along with Cryptocurrencies. Global developed market and Emerging market Equities remain in bullish uptrends.
I remain a bit concerned about the strong possibility of a choppy tape over the next two weeks, but Thursday’s surge certainly didn’t offer much sign of US Equities stalling out. Technology managed to power higher yet again, and along with Communication Services, has been a huge help to $SPX this week at a time when Equal-weighted $SPX has largely moved sideways.
As always, despite some of the recent warning signs that have cropped up, it remains essential to see that evidence of trend break before having much conviction of a possible selloff.
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Thomas J. Lee
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