MarketSurge powers the charts in this video.
The market often does the least expected. September was supposed to bring weak seasonality for stocks. Instead, we saw one of the strongest monthly performances of the year with multiple stocks rising 50-100%. November is supposed to bring bullish seasonality. Instead, we have seen an increasing number of stocks breaking down.
The momentum high flyers from September have given back most of their post-summer gains. Mega-caps are also showing signs of exhaustion. Many of the stocks that looked constructive ahead of their earnings were demolished after the reports. And yet, important support levels are holding – QQQ tested its 50dma near 600 and bounced. AMZN tested 240 and bounced. NVDA tested 180 and bounced. PLTR tested 170 and bounced. It is possible that those bounces are just knee-jerk reactions after being down multiple days in a row, or they could be another sign that buyers are not chasing blindly and prefer to enter at spots that offer better risk-to-reward opportunities. As of now, the recent market weakness looks like a normal pullback, but if Friday’s bounce fizzles quickly and the indexes make new lows, the situation will be very different.
In the meantime, Chinese ADRs are showing relative strength. It’s as if someone is betting on the Supreme Court ruling on tariffs – PDD, BABA, and BIDU seem to be setting up above their 50-day moving average. Stocks like Wayfair (W), which import most of their furniture from China, are also showing incredible relative strength.
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