WARNING... Time to Sell..?

Summary

In this financial analysis video, the presenter discusses the stock market's recent record highs and the potential implications of the Federal Reserve Chairman Jerome Powell's testimony. They highlight the NASDAQ's all-time high and the S&P's close approach to its target, pondering if it's time to sell. The video emphasizes the importance of market patterns and historical trends, suggesting that despite current bullish sentiment, investors should watch for specific indicators before making decisions. The presenter also previews upcoming economic data releases that could impact the market direction.

Takeaways

• 📈 The stock market has reached another record close, with the NASDAQ hitting an all-time high at $4.99 on QQQ.
• 🎯 The script discusses the significance of the number 500, as the market hit exactly 500 and then backed off, indicating a potential turning point.
• 🗣️ Jerome Powell's testimony did not significantly impact the markets, as there were no near-term policy signals, leading to a 'boring' but bullish market reaction.
• 📊 The S&P is close to reaching its target of 561, which is a critical level for the market's continuation of the uptrend.
• 📅 Historically, the first half of July has been a strong period for the stock market, but caution is advised as we approach July 17th.
• 🔍 The script emphasizes the importance of watching for patterns and signals in the NASDAQ, such as the formation of a full candle and repeated closing over the candle high.
• 📉 If the NASDAQ prints a daily lower low, it could signal a potential downturn back to support levels around 485.
• 📈 Conversely, maintaining a higher low and printing a higher high could push the market over the 500 area, confirming the uptrend.
• 🚫 The speaker advises against selling without waiting for confirmation of a downturn, such as a drop below the previous week's high.
• 💰 There is a significant amount of money in Money Market funds, indicating that many investors are on the sidelines, which could fuel further market gains if they decide to re-enter.
• 📊 The speaker expects positive economic data in the coming week, which could be bullish for the market, and is watching for the weekly chart to close over by Friday as a bullish sign.

Q & A

What is the significance of the stock market hitting an all-time high and what does the speaker refer to by 'Target hit'?

The 'Target hit' refers to the NASDAQ reaching an all-time high at $4.99, which is a significant milestone in the market's performance. It suggests that the market has reached a new peak, and the speaker is considering whether this is a good time to sell based on this achievement.

What is the role of Jerome Powell's testimony in the context of the market's movement?

Jerome Powell's testimony as the Chairman of the Federal Reserve is significant because it can influence market expectations regarding monetary policy. However, in this case, the market did not react significantly to his first day of testimony, indicating that his statements did not provide any immediate policy signals.

What does the speaker mean by 'mathematical extension' in relation to the market?

The 'mathematical extension' refers to a technical analysis tool used to project potential future price levels based on historical data and patterns. In this context, it was used to predict the all-time high of $4.99 on QQQ.

Why is the number 500 significant in the context of the NASDAQ's performance?

The number 500 is significant because it represents a psychological and technical resistance level that the NASDAQ has hit and then backed off from. This could indicate a potential turning point or a pause in the market's upward trend.

What is the speaker's view on the S&P 500's potential to reach its target of 5600?

The speaker suggests that the S&P 500 is within 1% of reaching its target of 5600, indicating a strong upward trend. However, they are also looking for confirmation from the NASDAQ and other market indicators to determine if this target will be achieved.

What historical pattern does the speaker refer to regarding the performance of the stock market in July?

The speaker refers to a historical pattern where the first 15 days of July have been the best two-week trading period of the year. However, they caution that things might change around July 17th, suggesting a potential shift in market sentiment or performance.

What is the importance of the pattern of 'low higher low higher' in the NASDAQ's candlestick chart?

The pattern of 'low higher low higher' indicates an expansion in the market's uptrend. It shows that the market has been making higher lows and higher highs, which is typically a bullish signal. The speaker is looking for this pattern to continue for further confirmation of the uptrend.

What does the speaker mean by 'falling below last week's high' as a potential market signal?

The speaker is suggesting that if the market falls below the high reached in the previous week, specifically at 496.6, it could be an early signal of a potential downturn or correction in the market.

What is the significance of the number 488 for the NASDAQ in the context of the speaker's analysis?

The number 488 is significant as it represents a level above which the NASDAQ would need to remain to maintain the bullish pattern of 'higher over the candle high.' If the index falls below this number, it could indicate a bearish shift.

What is the speaker's stance on selling in the current market conditions?

The speaker advises against selling immediately and suggests waiting for confirmation of a downturn, such as a drop below certain technical levels or the formation of a daily lower low. They seem to be in a 'buy the dip' mindset, anticipating further market gains.

What economic indicators and events does the speaker anticipate will influence the market in the coming week?

The speaker anticipates that Jerome Powell's second day of testimony, the 10-year auction, inflation numbers, a 30-year bond auction, and PPI data will be influential. They believe these indicators could provide bullish signals for the market.