Tentative calling of market top for the next few months?
- Thread starter yc47ib
- Start date
You didn't post that chart here 4 weeks ago for me to see. Or if you did, I did not see it in a thread.
Just having some fun with you, Overnight. At least to me, the melt-up already happened.
Doh, so yer calling a top! Bad juju!
Apparently the feeling is that yes, next week is going to finish down on average, based on historical analysis. I'll be looking for those dips to buy (if they occur).
I'm just looking for a ST top for now. I'm actually looking to buy weakness too as I don't think we're done going up yet in the bigger picture.
I'll take a stab at that question...
A combination of:
-supply chain back up
-mass firings/strikes tied to vaccine mandate
-inflation
-increased taxes
-increasing energy costs
If we had just one of those things, we'd be likely to ride though it, but all of that together?
I'm not sure.
Say you're already running a 12 month lead time for new orders and you're about to lose 10% of your workforce in an environment where hiring is already hard. Add to that rising costs and I would expect businesses to "pull back" and only go after the most appealing opportunities. The trouble is that if everyone does that, the economy takes a major hit.
One the plus side for stocks, I think we have their use as an inflation hedge, and the comparative health of the US vs. the rest of the world.
Once I stopped looking for catalysts, other than extreme sentiment / people being positioned the wrong way in the market at the wrong time, and just looked at my charts / indicators, my ability to see these turns became much better.
A lot of the negative "catalysts" the bears on here and lot of financial media dwell on have been really weak for most of 2021. Covid issues were real but mostly first half. And my observation is I rarely see people recognizing the positive catalysts ( e.g, earnings growth, GDP growth ) that occurred besides the more obvious cheap money reality. Some coverage of it in October but almost nothing most of the year. The only catalyst that concerned me in recent months was the Evergrande crisis and that turned out to be contained.
I don't see a top, but I can definitively say the market as a whole hasn't been this overbought in the last 3 years, since I started keeping track of week ending RSI indicators. Just in the last month, the gains are as follows on these indexes, the DOW +4.5%, the QQQ +9.5%, SPY +7%, the RUSSEL +9%, TRANSPORTS +15%. Much of the broader market is also overbought.
Week ending RSI-
DOW-71
QQQ-78.5
SPY-76.5
IWM-73.5-Russel
IYT-75-Transports
XLB-70.7-Materials
XLY-84.2-Consumer discretionary
XLK-77.75-Tech
SOXL-80.9-Semi's
SMH-79.9-Semi's
XLI-68.1-Industrials
USO, UNG, and XLE were also overbought for almost a month, but started a pullback 2 weeks ago. XLE-61.3
The laggards seem to be the Financials and Healthcare, XLF-55.73 and XLV-55.9 respectively.
Probably the most note worthy stocks to be overbought are TSLA and NVDA.
I would expect the garden variety pullback of 2-5% to begin in the next 5-10 days.
Personally, I'm hoping the market heads higher for the next several days so as is to make my short term short trade that much easier. Good Luck
Week ending RSI-
DOW-71
QQQ-78.5
SPY-76.5
IWM-73.5-Russel
IYT-75-Transports
XLB-70.7-Materials
XLY-84.2-Consumer discretionary
XLK-77.75-Tech
SOXL-80.9-Semi's
SMH-79.9-Semi's
XLI-68.1-Industrials
USO, UNG, and XLE were also overbought for almost a month, but started a pullback 2 weeks ago. XLE-61.3
The laggards seem to be the Financials and Healthcare, XLF-55.73 and XLV-55.9 respectively.
Probably the most note worthy stocks to be overbought are TSLA and NVDA.
I would expect the garden variety pullback of 2-5% to begin in the next 5-10 days.
Personally, I'm hoping the market heads higher for the next several days so as is to make my short term short trade that much easier. Good Luck