Buckle Up, This Could Cause A Large Move Tomorrow! Plus TOM LEE's New Year End Prediction!

Summary

In this video, Mike discusses market trends, focusing on the latest crypto and stock movements. He highlights Tom Lee's predictions for the year-end rally, which he believes is supported by a risk-on market sentiment and idle capital returning to play. Mike also analyzes recent stock sell-offs, such as in tech, and provides insights on stocks like Sofi and Tesla. He emphasizes the importance of patience for long-term investors, advising them to watch for pullbacks and support levels. With key macro events ahead, Mike shares his outlook on the market's potential moves in the coming weeks.

Takeaways

• 😀 Tom Lee has been accurate with his predictions about the crypto market and stock market over the last few years and makes another call for the year-end rally.
• 😀 Although there is euphoria in the market with crypto and high-flying stocks, profit-taking is occurring in tech stocks, especially Ftech, as shown in the charts.
• 😀 The current household allocation to stocks is at an all-time high, which could indicate a potential market pullback, but we'll have to wait to see if history repeats itself going into 2025.
• 😀 Tom Lee believes the year-end rally is a sign that investors are more risk-tolerant, with idle capital now moving into markets as investors anticipate positive market trends.
• 😀 The next few weeks will be crucial as important macro data (like jobs report, CPI, and FOMC rate decision) is released, which could influence the market's performance heading into a potential 'Santa Claus rally.'
• 😀 The market may see a correction soon as the QQQs have had a significant upward movement, but a pullback could set up for a future rise, particularly if stocks reach the Fibonacci discount range.
• 😀 Sentiment indexes, like Fear & Greed, indicate that the market is not in extreme 'greed' territory yet, suggesting there may still be room for upward movement before any correction occurs.
• 😀 Stock analysis for individual stocks like Roblox and Sofi shows that some stocks are starting to base and may be set for further gains, while others, like Sofi, may experience healthy pullbacks after rapid rises.
• 😀 Technical indicators such as moving averages and Fibonacci retracements are key to understanding support and resistance levels, with a pullback to these levels being part of a healthy market process.
• 😀 Several stocks, including Sofi, Hood, and Palantir, have been rising sharply since August, but they are now encountering resistance levels. A breakout above these levels could signal further upside, while failure to break could result in corrections.

Q & A

What is Tom Lee's prediction for the S&P 500 by the end of the year?

Tom Lee predicts that the S&P 500 could reach 6300 by the end of the year, despite potential bumps along the way.

Why does Tom Lee think Bitcoin's rise is significant for the broader market?

Tom Lee believes Bitcoin's rise signals a breakout from a holding pattern, which he sees as a precursor to the S&P's movements for the rest of the year.

What indicators are being watched to assess market risk over the next few weeks?

Key indicators include the jobs report, the CPI (Consumer Price Index), and the Federal Reserve's rate decision on December 18th, all of which could influence market sentiment.

What does Mike's analysis suggest about the market's recent rally?

Mike suggests that while the market is experiencing a rally, the sentiment and breadth are not at extreme levels. He highlights that extreme greed could trigger a correction if the market continues to climb.

What does the chart showing household allocation to stocks at all-time highs imply?

The chart indicates that household allocation to stocks is at its highest point, similar to past peaks like the dot-com era and the end of 2020, which may suggest a potential market pullback or correction in the near future.

How is sentiment being gauged in the current market?

Sentiment is being measured using indicators like the Fear and Greed Index, which currently shows moderate levels of greed. Additionally, stocks above their 50-day moving average are being tracked to gauge market strength.

What does Mike suggest could happen if the market experiences a pullback in the near term?

Mike suggests that if the market pulls back, it could reach a discount range near the 79% Fibonacci level, which could attract buyers and set the stage for a potential year-end rally.

What is the significance of the 'stage 2' phase for stocks like Roblox?

In the 'stage 2' phase, stocks tend to experience significant upward momentum. Mike believes Roblox is in this phase, and although it may face some pullbacks, it is likely to continue moving upward.

Why does Mike believe SoFi's recent pullback is a healthy development?

Mike sees SoFi's pullback as a natural correction after a huge move upward. The stock has been overbought and needs to consolidate and find support to ensure long-term growth.

How does Mike evaluate the stock chart for Palantir?

Mike notes that Palantir is in a consolidation zone after a significant move up. If it pulls back, he expects it to find support at the 50-day moving average or the 79% Fibonacci retracement level.

What are the key indicators to watch for Tesla in the near term?

For Tesla, Mike highlights trendline breaks and potential support levels. If Tesla can break through resistance levels, it could see further gains, but a pullback to test support levels is also a possibility.

How does the stock performance of Nvidia compare to other tech stocks in the market?

Nvidia has been underperforming in comparison to other tech stocks like Tesla. Mike mentions that Nvidia's stock is being closely watched for signs of a breakout, with its performance largely influenced by broader market movements.