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We’ve got red futures quotes for the equity markets for a change, which is welcome. I must say, with all the trade announcements, the fact the market hasn’t BUDGED for over a week is kind of indicative of how little the market cares about the trade wars anymore.
These same announcements would have had us crashing back in early April, but as it is now, it’s just a giant shrug of the shoulders, as illustrated by the /NQ:
As you probably know, the S&P 500 is not calculated by adding up the closing prices of the 500 component stocks and dividing by 500. Instead, it is weighted based on market cap. This, the company with the largest market cap of $4 trillion, NVDA, would be about 40 times more impactful to the value of the S&P 500 compared to, say, DoorDash, with about a $100 billion market cap.
If the 500 components all moved up and down the same degree, the equal-weighted S&P would be in lockstep with the “normal” market-cap-weighted S&P, and for many years that was pretty much the case. In recent years, however, the standard S&P has been outpacing the equal-weighted one to an increasing degree.
A couple of days ago, Bitcoin was near lifetime highs but was simultaneously at roughly the same price it was seven months prior. It didn’t seem like much an achievement, considering the tremendous amount of buying and political tailwinds crypto has enjoyed all year. On my tastylive show yesterday, however, I specifically said that Bitcoin seemed to be at the cusp of a breakout, and sure enough, shortly after my show, it rocketed higher to a new lifetime high and then, just this afternoon, rocketed yet again more thousands of dollars. So, bear though I may be, I called this one right.
Here below is a synoptic view of the DAILY situation for the 3 main US indices: the RUT is the one that appears to be overbought (82% probability of DAILY reversal).
At the close today, the RUT Index was showing this scenario: 3 days up, closed at 2263.41, the time model (right hand side) shows 87% probability of reversal after 3 days up, when this particular trend pattern is encountered.
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