Momentum Monday – Do You Chase the Rally or Wait for a Pullback?

All charts on Momentum Monday are powered by MarketSmith

There are two catalysts going for the bulls right now:
1) A potential trade deal between the U.S. and China.
2) The Fed becoming more neutral and pausing the interest rate increase.

The trade deal has been kicked down the road. The Fed will likely not hike again in December. The market has already priced in those events. If the market’s thesis is not confirmed by reality, we might see another leg lower.

In the meantime, growth stocks are gapping up this morning. Many of them had a substantial move in the past few days, so some form of profit taking is normal. The big question here is if dip buyers will step up and buy that pullback ferociously. There’s is a decent chance for a fear-of-missing-out-year-end chase. $280 is the line in the sand for the SPY – the line that divides greed and fear. Buyers are higher, sellers are lower.

In today’s Momentum Monday, we went over MSFT, CSCO, AMGN, EXAS, V, SPY, QQQ, TSLA, MDB, SHOP, OKTA, CROX, GOOS, UBNT, etc.

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