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Tuesday, December 7, 2021

Market Update 12/7/21 - The Rally Continues

 Looks like this rally - the one I called Friday - in real time - might have legs. We haven't seen any follow-through in a long time, but Dec is a window dressing month, and that's the only reason the fed continues to drag it's feet. 

We're seeing Europe up big, and Germany up 2%, so that's helping lift US futures. Is this due to lower energy prices? Funny you don't hear Bloomberg talking up Natural Gas anymore. I'll be covering commodities in a separate update, by the way.   

The Dow - is trading back above 35k. Watch resistance @ the 50 day. If it breaks out.... then that becomes the stop.

I didn't realize it until this morning, but the Dow bottomed at precisely 34k!  Can the Dow trade to 40k+, before the end of the year? This chart says, "yes". 

$SPX - breaks out above 4545 (support), after last weeks test of the 50 day moving average.  

As bullish as the above chart patterns look, I can't seem to figure out which sectors would lead that kind of rally. Big tech bounced off the 50 day moving average, with most everything else, but I don't see the $NDX breaking out, and leading the $SPX, to new highs.   

Energy maybe? 

$XOP looks like a pullback in the middle of an irrational wave "E". As explosive as this could be, it won't lift the broader market much. 

We also saw this breakout in Oil and Gas drillers, as seen on the $OIH chart, located in the public charts area 

Mining stocks? 

I'm still waiting for Gold, and precious metals, to snapback, and seems to be taking forever, but some of the gold miners seem poised to snapback.  


China - I think everyone is bearish China at this point. 

$FXI - looks like it could rally into the new year, in a continuing wave 4. Target looks like the 200 day ma. 

Certain financials are also poised to lead, and that could help lift the market in a big way. 

After all the talk about inflation, supply lines, and the fed raising rates, the home builders have broke out to new all time highs. Pull the $ITB chart up for yourself. 

The $VIX has already broke 3 levels of support, and 30 becomes the line in the sand again. 

I still have a lot of charting to do, and still don't really trust this rally, until we see more follow-through, but it looks pretty strong this morning.   

Good Luck, AA 

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