WARNING... Time to Sell..?

Stocks Today

9 Jul 202408:30

Summary

TLDRIn 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.

Outlines

00:00

📈 Stock Market Analysis: Record Highs and Target Hits

The video discusses the stock market's bullish trend, with a focus on the NASDAQ hitting an all-time high and the potential implications of Jerome Powell's testimony. It highlights the significance of the market's reaction to Powell's first day of testimony and the anticipation of his second day. The speaker emphasizes the importance of the NASDAQ's 16,161 extension, which led to a target hit at $4.99 on QQQ, and the S&P's close proximity to its 5600 target. The video also touches on the historical performance of the stock market in the first half of July and the potential for a change in trend around July 17th. Key technical analysis points, such as the importance of maintaining over the candle high and the potential for a daily lower low, are discussed as indicators for market direction.

05:02

📊 Market Trends and Upcoming Economic Indicators

This paragraph delves into the current market trends, noting the cooling off of fear and greed indices, and the market's continued upward movement despite a significant amount of money being parked in Money Market funds. The speaker suggests that the market's performance could be influenced by upcoming economic indicators and events, such as Jerome Powell's second day of testimony, the 10-year auction, and the release of inflation numbers. The paragraph also mentions the potential bullish impact of these events and the importance of watching the weekly chart for market direction. The speaker expresses a personal bias towards buying if the market dips, based on historical trends and the anticipation of positive economic data. The video concludes with a brief mention of bank earnings and a technical analysis of the XLF, suggesting a potential for further market gains.

Mindmap

Keywords

💡Stock Market Bulls

The term 'Stock Market Bulls' refers to investors who have a positive outlook on the market, expecting prices to rise. In the video's context, it is used to describe the current sentiment driving the market to record highs. The script mentions 'market Bulls' in the opening, indicating the force behind the continuous record closes.

💡Record Close

A 'Record Close' in the stock market signifies the highest level that the market or a specific stock has reached at the end of a trading session. The script discusses multiple 'record closes,' highlighting the bullish trend and the potential for a sell-off after reaching new highs.

💡Target Hit

'Target Hit' is a term used in trading to indicate that a price level, which was previously set as a goal or resistance, has been reached. The video discusses the 'Target hit' in relation to the QQQ stock, which has hit an all-time high, suggesting a potential turning point in the market trend.

💡Jerome Powell

Jerome Powell is the Chairman of the Federal Reserve, and his statements can significantly impact financial markets. The script mentions his testimony to Congress, which is closely watched by investors for any signals on monetary policy, although in this case, the market did not react strongly to his statements.

💡All-Time High

An 'All-Time High' is a term used to describe the highest price that an asset, such as a stock or index, has ever reached. The video discusses the QQQ hitting an all-time high, which is a significant event in the context of evaluating market performance and potential future direction.

💡Mathematical Extension

A 'Mathematical Extension' in the context of trading refers to a technical analysis tool used to project future price levels based on historical data. The script uses this term to discuss the QQQ stock reaching $4.99, indicating a specific price level derived from technical analysis.

💡Iceberg

In the financial context, 'Iceberg' can metaphorically represent a large hidden risk or challenge beneath the surface. The script uses the term to suggest that after hitting the target, there might be unseen risks that could lead to a market downturn.

💡NASDAQ

NASDAQ is a major stock exchange known for listing technology and biotechnology companies. The script discusses the NASDAQ's performance, particularly its reaching of an all-time high and its potential to influence other market indices.

💡S&P 500

The S&P 500 is a stock market index that measures the performance of 500 large companies listed on stock exchanges in the United States. The video mentions the S&P 500 in relation to its target of 5600, indicating a specific price level that investors are watching closely.

💡Candlestick Chart

A 'Candlestick Chart' is a style of financial chart used to describe price movements of a security, derivative, or currency. The script discusses the pattern of candles on the NASDAQ chart, indicating a series of higher lows and the importance of closing over the candle high as a bullish signal.

💡Money Market Funds

Money Market Funds are a type of investment fund that invests in high credit quality, short-term debt. The script mentions the increase in Money Market funds, suggesting that some investors are moving to safer assets, which could potentially impact the stock market.

💡Fear and Greed Index

The 'Fear and Greed Index' is a sentiment indicator that reflects the current state of the market based on various factors. The script notes that the index has cooled off, indicating a neutral sentiment, despite the market's continued rise, which could be a sign of potential market complacency.

💡Inflation Numbers

Inflation numbers refer to the statistical data that measures the rate at which the general level of prices for goods and services is rising. The video anticipates the release of inflation data and suggests that lower-than-expected inflation could be bullish for the market, as it might signal the potential for interest rate cuts.

💡Bank Earnings

Bank Earnings refer to the profits reported by banks, which can significantly influence the financial sector and the broader market. The script mentions upcoming bank earnings reports, indicating that these could be a significant event for market participants to watch.

Highlights

Stock market hits another record close, raising questions about potential selling opportunities.

Target hit on QQQ at an all-time high mathematical extension of $4.99.

Market reaction to Jerome Powell's testimony was muted with no significant policy signals.

NASDAQ and S&P are near their respective targets, with S&P close to 5600.

Historical data suggests the first half of July is typically a strong period for stock trading.

A potential change in market direction could be signaled by a daily lower low on NASDAQ.

Maintaining a higher low and higher high on NASDAQ could push the index over 500.

A fail breakout pattern on the monthly chart could be significant for NASDAQ.

NASDAQ's key number for continued bullish trend is over 488.

S&P's key resistance levels are 550 and 551, indicating a bullish trend if maintained.

A drop below last week's high at 4 96.6 could indicate a market downturn.

Historical patterns suggest buying the dip could be a profitable strategy.

Market sentiment has cooled, with fear and greed indicators showing neutrality.

There is over $6.1 trillion in Money Market funds, indicating potential for market growth.

Upcoming economic data releases, including inflation numbers, could influence market direction.

Bank earnings and economic indicators may provide further market direction cues.

XLF has digested gains and is back above its all-time high, suggesting potential for further growth.