It appears that the NASDAQ has broken out of a cup with handle pattern.
Nasdaq 100 E-mini Daily Commodity Futures Price Chart : CME (tradingcharts.com)
Cup and Handle Pattern: How to Trade and Target with an Example (investopedia.com)
No comment here on the cup and handle chart pattern.
I usually stay out of the way when any market is making new highs.
So, although markets are overvalued, they can get more overvalued.
Still, there is a bearish voice in my head that I will share here.
We are still in the aftermath of the pandemic from an economic point of view. When the pandemic hit in March of 2020 the Fed went with the helicopter money solution. Zero interest rates plus buying corporate bonds that were getting hammered. Additionally, congress and the Trump administration were sending out checks to everybody, even people who didn't need them at all. Let me be clear. This is NOT a political post. Given the potential economic calamity, the government had to do something. History, not I, will judge those decisions.
Those trillions of dollars injected into the system resulted in the stock market more than doubling in 15 months. Those highs, roughly 4800 in the S&P, and 16,000 in the Nasdaq, reflect easy money excessive valuations. Since then, the Fed has reversed course and started tightening to fight inflation. That resulted in an oversold situation last fall. The bearishness at the lows (3500 S&P, 10,000 Nasdaq) was overwhelming. Everyone was predicting recession due to the interest rate hikes and the inverted yield curve. It never happened.
My sense is that the highs and the lows may be our range for a couple of years to come. So as we approach the helicopter highs I'd be inclined to trim stock ownership (I have done so yesterday). I hope I'm wrong for selling some and we rally to the moon.
The one part of the landscape that I don't completely understand is AI and how much of a productivity boost that will be for the economy. If it is as great as some folks are predicting, then that will mitigate many of our fiscal time bombs (baby boomers getting old, government debt - to - GDP ratio continually growing).
2 cents...
Wonderful thoughts….worth much more than 2c.
thanks!
NASDAQ marches higher, but at some point, correction coming. But can remain strong for some time.
TSLA also broke out of a cup with handle pattern at $284. on 7-17
taking profit from NASDAQ trade today
Congrats, cutworm!
We should mention that a black swan event RISK here is historically very high because of the war in Ukraine.
If somebody uses nuclear weapons, you don't want to be long the stock market on a speculative short term swing trade.
If someone starts firing off nukes the stock market will be the least of our worries.
You got that right!
It's sad to realize that, for many people this war has been accepted and dialed into our lives as something that isn't really as bad as it is because its somewhere else, killing hundreds of thousands of people that aren't Americans and obliterating a country that isn't the United States.
Wake the H up people!
These are real human beings on both sides and a country has been decimated and the entire world is suffering from supply side inflation, especially the poor and its escalating not getting closer to a solution.
Stop falling for the lame excuse that this is the only way to stop Putin, while they completely refuse to negotiate or give him anything.
These psychopaths (Putin, Biden and puppet man getting his entire army and country wiped out for personal agenda) will NOT stop unless Americans stand up and protest against funding the war and demand negotiating with Russia.
There doesn't even seem to be a hint of that.
https://www.marketforum.com/forum/topic/97046/#97353
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MADRID, May 9 (Reuters) - UN Secretary General Antonio Guterres said he sees no immediate possibility of reaching a comprehensive ceasefire in the war in Ukraine as both sides are convinced they can win, according to an interview published by Spanish newspaper El Pais on Tuesday.
