Yes, Still Broadening

S&P 500 traded on a weak note Monday, yet signs from Russell 2000, cryptos, and financials with industrials point to merely temporary reprieve in the broadening rally. Global liquidity is still favorable as Bitcoin and its miners plays within equities (MARA, COIN, MSTR, RIOT) point to, and Russell 2000 outperforming VTV and cyclical without these playing some catch up, won‘t last forever.

Now, let‘s just get core PCE Thursday out of the way – not that the Fed would have been dovish in its pronouncements before. Risk-on with solid economy performance and homebuilders with biotech on fire, goes on.

As stated in Sunday‘s extensive analysis:

(…) There is power in reasoned simplicity – economy isn‘t slowing down, job market is performing, PMIs are improving, global liquidity and easy monetary conditions prevail. Strong NVDA earnings beat caused much appetite to invest elsewhere as well, and the earnings driven rally continues – Q4 earnings haven‘t been disappointing, and neither was the overall guidance.

Recession is far away in the era of fiscal dominance as talked in quite a few latest analyses, and yields while rising, are yet nowhere near killing the stock market advance – expect though volatility to increase when tax season gets underway.

Here is how I summed yesterday‘s session and prospects in going for 5,125 which would not mark a double top, in our channel – the longer we trade dicey below 5,088, the greater the opportunities sellers have to start probing again..

intraday

Let‘s move right into the charts (all courtesy of www.stockcharts.com).
 

S&P 500 and Nasdaq Outlook

S&P 500 and Nasdaq

Indeed, 5,080s were reached as per yesterday‘s call, and it got only a little worse. Overnight bottom was carved, and now the buyers are trying to come back – with hiccups. Clearing 5,088 is a bare minimum target to level the playing field.

5,005 and a few points below would represent first serious resistance, and then there is 5,015 – the path to 5,125 won‘t be easy – good catalyst of not too hot inflation required.


More By This Author:

Broadening S&P Rally
Riding NVDA Wave
NVDA Reversing Islands

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