MarketSurge powers the charts in this video.
There are more stocks breaking out from various industries – AI, cybersecurity, infrastructure, and aerospace. The Nasdaq 100 tested its 50 and 200-day moving averages and didn’t even blink. Last week, the market went up on both good and bad news. The negative GDP print earlier in the week led to a quick shakeout that was bought immediately. The better-than-expected employment report led to a rally. These are all signs of improving price action and sentiment.
Does that mean that it makes sense to chase blindly with the indexes near potential resistance and so far extended from their 20-day moving average? Not in my book. It also doesn’t mean that one has to remain stubbornly bearish when the price action is saying we should be looking for long setups.
META and MSFT crushed earnings estimates and broke out above their 200dma. It was a huge sentiment boost for the market as it proved that the death of Mag7 is likely exaggerated and there’s still plenty of demand for the strongest and biggest companies in the world economy.
The trade war remains a viable headline risk. Maybe we will see its real effect in the second half of the year. The odds are that there will be other extreme spikes in volatility. In the meantime, plenty of underinvested money managers are praying for a pullback to get in. Dips are likely to get bought. Chasers are likely to be shaken out.
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