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Thursday, October 28, 2021

Market Update 10/28/2021 - The Return Of Mixed Markets

 Looks like we're back to mixed markets, although trading remains pretty dull. How dull is it? It was so dull I fell asleep in the afternoon, and didn't wake up until after the closing bell. I was a little surprised to see the DOW down so mush but the NASDAQ actually end up? 

I was also surprised to see that $FB continued to sell off, even as money continues to flow back into Tech. Is this a sector rotation? It's too soon to say, but we did see China pull back, and treasuries rally.  I could spend the whole blog on that, but it looks like someone is targeting Facebook, after I recommended it. and that means we're probably being watched, and targeted by some hedgies. This certainly wouldn't be the first time....   

$FB Strong Buy ahead of the Thanksgiving holiday short covering season  

$FB - long term chart - There's just a ton of support down here - Yesterday's low, 305, 295. Take your pick, or just keep adding.... 

I would sell Microsoft, and buy Facebook... because you know the controllers aren't going to allow 2 FAANG stocks to sell off at once. 

$MSFT - 

Speaking of "new highs", look what has happened to $IBM... 

$IBM - headline risk was "New (multiyear) Highs", being reported, back in June. I suppose I like it for a trade, after yesterday's little shakeout, and I'm already seeing it up in pre-market. 

So, "new highs", can actually be bearish. Maybe someone could explain this to the lame stream media? Remember when CNBC was reporting 50 new all time highs (for the year), on the $SPX. That was obviously - in hindsight - a bearish indicator.    

 Tesla "reaches a $trillion market cap, and all time new highs". just screams "bearish" to me, and especially when the top of the range confirms it. 


While we're looking at over-priced automobiles, let's check FORD, which we also see being pumped. 

$F - Taking one look at the chart - bearish. 

As long as we're looking at stocks. 

$HOOD  looks good - for a trade, and especially after Bloomberg made a point to report that it was trading below it's IPO price. Meaningless headline, designed to shake the weak hands.

 How 'bout the new high on the $NYSE?! 

$NYSE - holds up for 3 days, before breaking. This is the reason I added this chart to the public charts area! 

$SPX - makes a new all time high. Most technicians thought once the pattern broke, and the 50 day moving average with it, that the market couldn't rally back to a new all time high, but they were wrong. 

As far as timing the trade: 

1. The ECB reports today, and they are expected to stand pat, regardless of the main stream media hyperventilating over inflation worries. I think that's probably why we saw the Bond vigilantes capitulate yesterday. 

 2. $SPX can certainly retest yesterday's high, and take out the 4600 target, and tomorrow is weekly OPEX. 

3. The 10 minute $VIX, remains market bullish. 

$VIX #1 - broke out of the down-turned triangle, and hit res. This is a bear trap... 

$VIX #2 - trades into another down-turned triangle. No change. 

Good luck timing the reversal, with Nov. OPEX coming fast, and Thanksgiving short covering season, starting around the same time. 

I'm sure we'll find a window for a pullback, but just not sure exactly where. Maybe a Monday morning surprise, followed by a shakeout into the end of OCT? But that allow much time for a pullback. 

Another possibility is that we see a sector rotation out of Bond yields, and Energy, and financials. 

$NDX (big Tech) Can the $NDX continue to rally to new highs? The 16000 target seems almost guaranteed. 

Take Care, AA   

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