The NASDAQ closed above its 200-day moving average last Friday with heavy volume (29% above 50-day average volume), first time since the Fed induced correction! Now all major indices are above their 200-day moving average and that’s a definite bullish statement if the 200-day moving average is not violated on the downside. The Fed
The stock market rally appears to be rotating toward tech growth plays after a long break. The NASDAQ hit a bear market closing low as recently as Dec. 28. But in 2023, the NASDAQ is up 6.4%. The SMH chip ETF has rallied 12%, the IGV software ETF 5.5% and the speculative ARKK 16.8%. This is a clear risk-on signal.
We had December CPI release and banks’ earnings reports last week. The December CPI was falling as expected and the banks’ earnings were not as bad as feared, although the CEOs kept talking about “mild recession”. The sentiment continues to be bearish, but the price action is quite bullish. The S&P 500 cash index closed above its 200-day moving average again last Friday. This is the second
Since the December FOMC meeting on December 13, 2022, the market has been thoroughly scared of the Fed’s hawkish rhetoric. The S&P 500 was sold off to make a bottom on December 22, 2022, right before the Christmas and New Year’s holiday. The market has been trapped for 9 trading days until the December Employment Situation report on Friday January
The year of 2022 has been exceedingly difficult for the investing universe. The ending of an easy money policy era has been painful, to say the least. All markets have been terrorized by the Fed for the most part of 2022.
According to Bespoke Investment, 2022 is the first year in the history of the AAII survey (since 1987) that bullish
