The recent rally in electric vehicle stocks such as Tesla, Lucid and the new IPO Rivian got people talking about Apple’s potential entrance to the electric and autonomous vehicle market in 2025. Bloomberg released a report to confirm the rumor, which caused Apple stock to rally to a new high.
The indices had a quick 3% dip due to inflation scares, but the dip-buying army jumped in with both feet after 3 days of mild selling. The indices closed in a very positive posture last Friday. Overall the market is very bullish and the year end rally is still in progress.
The stock market has kicked the seasonal pattern in high gear since the early October low. It is marching on regardless what’s happening in the real world, good or bad. This is what a melt-up market does. It obliterates all doubters by hurting the daring shorts and keeping the sane investors who are afraid to chase out of the raging market.
Apple and Amazon missed earnings last week due to supply chain and labor issues. The overwhelming response was to buy the dip because Wall Street believed the issues are temporary. We believe the supply chain issues are temporary too. But how long is considered temporary? It seems that no one cares because everyone is flush with money!
As we anticipated, good earnings did power the market out of indecision last week. The DOW and S&P 500 decisively closed above their perspective 50-day moving average. The NASDAQ decisively broke the down trend line with volume. All in all, the seasonal correction is OVER. If there aren’t any surprises (unknown events /shocks)
