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Watch Out for the Elephant Dung 1/30/24

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A two day circus is in town. It's the FOMCircus featuring ringmaster Lord Jaysus Powell, and his Clown Posse. 

The stock market celebrated its arrival yesterday. Anything that happens in the market between now and tomorrow's dog and pony show is just for show. The real action comes Thursday. Meanwhile, be careful where you step. 

That said we have both a 5 day cycle projection and conventional measured move target of 4940 on the hourly chart of the ES, 24 hour S&P futures. No doubt when the circus opens tomorrow, the market will zoom to 5000 for show. But what happens after that will be interesting.  The Danger Is that the Rally is Narrowly Based

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OK, not all but most. Two hit their stops over the past couple of days and 5 more will be closed out from the list based on this morning’s opening price in New York trading. That will still leave 5 shorts from our last review last week. There are also 5 longs remaining open. Non-subscribers click here for access.

Technical Trader subscribers click here to download the complete report.

The pick list gained a tad in the past week. It currently shows an average gain of 1.8% on an average holding period of 20 calendar days. That’s up from an average gain of 1.6% on an average holding period of 18 calendar days last week. This includes currently open picks, those that will be closed out today, and those that have hit stops over the past week. Non-subscribers click here for access.

Over the past two trading sessions there were 27 charts with a second buy signal on the week, and 22 with a second sell signal. That’s both a small total and a small buy side margin. It suggests that this rally is very narrow and in its late stages.  Non-subscribers click here for access.

I visually reviewed all of the charts. I wasn’t enthused about the sells. I’m not a fan of exercises in top picking when we’re only looking at the charts once a week. Even if they break, the bounces come quickly. I chose 5 buys to add to the list, as shown, with charts below.  Non-subscribers click here for access.

I will start tracking the new picks based on a price assuming a half position at the open and half at the close today, January 30, 2024. I have added or adjusted stops on a few of the picks. The rest I’m giving room to breathe for this week. The table also shows picks to be closed out as of today’s open.  Non-subscribers click here for access.

Table of picks and performance in the subscriber report. Non-subscribers click here for access.

Not a subscriber? Get price and time targets, and weekly swing trade chart picks, risk free for 90 days! 

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According to strategists at JPMorgan Chase & Co, the dominance of the top 10 stocks in the US equity market increasingly resembles the dotcom bubble, increasing the risk of a sell-off. The share of the 10 largest companies in the MSCI USA index, including all the so-called Magnificent Seven technology stocks, rose to 29.3% at the end of December. This is only slightly below the historical peak of 33.2% in June 2000.The strategists also note that only four sectors are represented in the top 10, compared to the historical median of six. "The key finding is that extreme concentration now poses a clear risk to equity markets in 2024. Just as a very limited number of stocks have been responsible for most of the gains in the MSCI US Index, declines in the top 10 could drag equity markets down."

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I wonder why the FOMC hasn't gone back to the one day meeting? I remember that the crowd went wild when they had the first two day meeting but I can't guess when that was.  At the time I wondered what would happen if they announced a 3 day meeting but all these years later going back to one day would have made more sense. I'm sure the lunches are nice. Do they get dinners too?

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2 hours ago, SiP said:

According to strategists at JPMorgan Chase & Co, the dominance of the top 10 stocks in the US equity market increasingly resembles the dotcom bubble, increasing the risk of a sell-off. The share of the 10 largest companies in the MSCI USA index, including all the so-called Magnificent Seven technology stocks, rose to 29.3% at the end of December. This is only slightly below the historical peak of 33.2% in June 2000.The strategists also note that only four sectors are represented in the top 10, compared to the historical median of six. "The key finding is that extreme concentration now poses a clear risk to equity markets in 2024. Just as a very limited number of stocks have been responsible for most of the gains in the MSCI US Index, declines in the top 10 could drag equity markets down."

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Similar to my findings. Hmmm.... The Danger Is that the Rally is Narrowly Based

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1 hour ago, Jorma said:

I wonder why the FOMC hasn't gone back to the one day meeting? I remember that the crowd went wild when they had the first two day meeting but I can't guess when that was.  At the time I wondered what would happen if they announced a 3 day meeting but all these years later going back to one day would have made more sense. I'm sure the lunches are nice. Do they get dinners too?

 

1 minute ago, fxfox said:

Yes. At your cost. 😂

And $129 billion in negative liabilities.  

 Fed Balance Sheet Right Now Says Bears Should Get Ready to Rumble

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14 minutes ago, DrStool said:

They're setting up to ram it to 5k Tamara. 

The Left is so desperate they even bomb it to 10k right in front of the election and if the Head of the BLS refuses to masssge the numbers as they want there will one of those famous „Helicopter accidents“ or some stuff from the „Final Destination“ playbook 😂

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That's ridiculous. 

Meanwhile, Republican governors are saying that the law is what they say it is. 

god almighty we are in trouble. 

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