Ivanhoff Capital

MarketSurge powers the charts in this video.

Rates are rising. The 10-year yield is not far from making a new multi-year high and reaching 5%. The market expectations for more rate cuts this year have significantly slumped. This is not a bullish backdrop for most stocks.

SPY, QQQ, and IWM made new YTD lows. Small caps IWM have already given back their post-election gains, and SPY is not far from closing its election gap. SPY and QQQ made a lower high last week and are now hanging on a thin thread. 

There aren’t many financial assets that have remained above their VWAP (volume-weighted average price) since the elections. TSLA, Bitcoin, META, and GOOGL are still among them. TSLA and Bitcoin tested multiple times their VWAP since the elections. The more times one level is tested, the weaker it becomes. META finished green on Friday in an ocean of red. META would be among the big winners if TikTok really closes its business in the US. 

One of the strongest groups in the New Year has been utilities. AI and quantum computing need vast amounts of energy, so it only makes sense that utilities like CEG, VST, GEV, TLN, and NRG are among the current momentum leaders.

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MarketSurge powers the charts in this video.

The indexes might struggle to get a proper bounce, but the new year began strong for a decent number of momentum stocks. If the thesis that the price action in momentum stocks precedes the price action in the general market is true, then we may see a more sustainable bounce around the corner. 

The market is excited about the new year’s possibilities, and so many of the themes that shined in 2024 are currently outperforming – AI, quantum computing, crypto, robotics, drones, and air taxis.

NVDA is still the leader. It finally broke above its 50dma above 140, and it might be heading for a test of 150. Other AI-related stocks are also standing out. MRVL and AVGO allow other companies to create their own AI chips. VRT provides the cooling technology needed for data centers, and VST, CEG, and GEV provide the energy needed to power data centers. 

Bitcoin has kept finding support near the VWAP since the elections. It had another bounce at the start of the new year, which brought enthusiasm to the rest of the crypto space – Solana, Ethereum, etc. The crypto plays in the stock market also bounced – COIN, MSTR, HOOD, MARA.

GOOGL made a higher low above its 20dma. It might be setting up for another leg higher towards 200-220. Google is a leader in all hot themes right now – AI, self-driving, robotics, quantum computing, etc.

As expected, Tesla missed Q4 deliveries estimates. It pulled back to the VWAP since the elections around 375 where it found support. TSLA is a meme stock in a way, so dips are a buying opportunity until it closes below 375.

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Disclaimer: Everything I share is for educational and informational purposes only and it should not be considered financial advice. Read my full disclaimer here.

MarketSurge powers the charts in this video.

The range-bound choppy tape remains in full force. SPY rallied to its 20dma where it found resistance and it pulled back to its 50dma where it found support. SPY is market cap weighted. Ten stocks account for almost 40% of SPY. Those ten megacaps have been among the best performers year-to-date and in the past three years. This explains the significant divergence between SPY and the equal-weighted S&P 500 – RSP. Get this – while SPY is up 25% YTD, RSP is up 12%. A few megacaps are keeping the indexes afloat while there’s selling under the surface. What’s new would say some. This has been the case for a long time and it hasn’t mattered. True. I can’t argue against that. Maybe that divergence doesn’t matter and the bullish trend will continue. Maybe, it’ll lead to a market correction. Either way, we will adjust to what the market offers and position accordingly. 

In the meantime, crypto-related stocks and ETFs have been under some pressure lately. Crypto has been the undisputed leader since the elections but it is starting to lose its luster. COIN, MSTR, WMGI, Solana, and Ethereum are now below their VWAP since the elections. This means that the average buyer since the elections is now underwater. Only Bitcoin has managed to hold above its VWAP since the election but barely – this level has been tested multiple times in the past couple of weeks and might break at some point. TSLA is also starting to crack and amass distribution days. NVDA has notably been underperforming in the fourth quarter. The leaders are giving ground back. 

Quantum computing is one of the few spots that has remained predominantly bullish, but even there, we are seeing some signs of exhaustion. In other words, the market might need some break to build new setups. This break could come in the form of a range-bound choppy environment or a 5-15% correction.

Try my subscription service which includes a private X feed with option and stock ideas, emails with concise market commentary, real-time market education, the Momentum 40 list of market leaders, and much more. See what subscribers say about my educational service.

Check out my free weekly email to get an idea of the content I share with members. How my ideas/alerts did.

You can find my trading books on Amazon here.

Disclaimer: Everything I share is for educational and informational purposes only and it should not be considered financial advice. Read my full disclaimer here.