MarketSmith powers the charts in this video
Most stocks and indexes had a red December giving back the majority of their November gains. Biotech XBI was an exception but it also didn’t really rally in October and November like the rest of the market. The 52-week list is still almost empty but biotech stocks are dominating it. If we see a market bounce attempt, biotechs are likely to be among the leaders. Some biotechs on my Momentum 40 list include AXSM, HALO, HRMY, MRNA, AMLX, SRPT, ACLX, etc.
In the first three weeks of a new year, we typically see many of the biggest laggards from the previous year outperform, especially small caps. We might see something similar in January unless the indexes really break down. Stocks like TSLA, GNRC, MTCH, ALGN, and SIVB which were the worst performers on the SP500 in 2022 might benefit in a range-bound January. Some of them have already started to bounce.
The next earnings season starts in a couple of weeks with financials reporting first. Usually, the period between earnings seasons is bullish for most stocks but such observations play a little role during bear markets. The indexes are still in one. If QQQ loses 262, it can test 255. If SPY loses 378, it can test 370.
Happy New Year! Let’s make it a great one!
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