Stocks Are Rising On August 26 As Momentum Remains Strong

Another day, another stock market advance. Markets started mostly weaker across Asia but managed to stage a late comeback to finish slightly higher. Meanwhile, the Nasdaq 100 ETF (QQQ) is rising by 50 bps after Salesforce delivered better than expected results.

The big question that remains is how much higher the Nasdaq will rise. Do we gap higher and fill the gap and move lower? Possibly. The momentum in the market remains very strong, and as long as the uptrend remains, we must respect the rising momentum. But as I pointed out yesterday, the last several times the QQQ has hit the upper end of the trading channel and RSI over 70, it has led to a move to the lower end of the channel. Yet to be seen, but worth noting.

10-Year (TLT)

Meanwhile, Treasury yields are rising today and testing the early August highs at 73 bps. The next level for yields comes around 78 bps. Again, higher rates and a strong dollar could be the one thing that messes the equity market rally up.

Tesla (TSLA)

Tesla is rising today after Jefferies raised its price target on the stock to $2,500. At this point, it feels like analysts are just chasing stocks higher, falling over themselves to keep their target’s relevance. Resistance remains around $2,100.

I moved support on Gold down to $1913. It seems like there a bearish descending triangle forming in the metal, which likely results in a decline to $1865.

Square (SQ)

Square continues to rise to maintain its perfect uptrend. Now it may be forming an ascending triangle, with the potential for the shares to go even higher. Maybe even to $188.