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Tesla has morphed from the world’s most exciting stock to something that more closely resembles a passbook savings account. Indeed, from June 8 2023 through January 8 2024, a period of seven months, the stock changed…….ZERO. I would like to suggest the analog below, which indicates that the price is going to continue to meander lower for weeks to come.
Shame on me. As the markets exploded yesterday for positively NO reason whatsoever (except Fed jawboning), I wanted to make my short positions even more aggressive near the close, but I chickened out. The /ES ripped almost 100 points higher (again, for NO reason), moving the market from Laughably Overvalued to Insanely Overvalued, and I didn’t do anything about it. It’s no shock that all the equity futures are down right now, but let’s none of us forget the (fake) CPI numbers coming out Thursday morning. That’s a big risk.
The market is still in BULL mode. It’s going to take a lot to change that. Below are four index charts, with the levels highlighted showing precisely what price levels must break to start to turn things truly to the bearish favor.
As valuable as it is to recognize patterns, it is just as valuable to recognize when price action exits a permissible zone. Sometimes this can be in the form of prices just “exiting stage left” from a formation, and other times the pattern will be complete and behaving itself and then suddenly do a 180-degree turn. Here are three examples of topping patterns that DID look good but defied expectations (and should have been aborted when the violation took place).
Today is the last trading day of 2023, and is the only significantly bearish leaning day this week. Historically the stats today indicate 38.1% stats for SPX closing green, and only 28.6% green closes on NDX. That doesn’t of course mean that the day will be particularly interesting, but intraday at least the last couple of days have been more interesting than I was expecting.
On the bigger picture, I was looking for a retest of the 2023 high on SPX to set possible daily RSI 14 and RSI 5 sell signals brewing, and we saw that. The high this week so far is at 4793.30, just 25 handles below the all time high, and I’m still thinking that a decent retracement looks very close, and that SPX might make a marginal new all time high before we see that retracement.
Either way we appear to be setting up for an interesting January.
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