“The Bullish trend is still up in here, and new money is flowing” — Paul Ebeling
Last weeks action closed the month of January.
Stocks rebound, but did not finish on the Northside. Sentiment indicators are extended some. The benchmark indexes pulled back but their support held.
Friday’s action to close the month set up the market for new money to enter in early February.
HeffX-LTN’s overall technical analysis for the major US stock market indexes for the wk and month ending 29 January 2021 is Neutral to Bullish with a long-term Very Bullish bias.
- Russell 2000 +5.0% YTD
- NAS Comp +1.4% YTD
- S&P 500 -1.1% YTD
- DJIA -2.0% YTD
On the short-squeeze activity that is all over the news
The SEC said Friday that it is evaluating “the extreme price volatility of certain stocks’ trading prices,” warning that such volatility can expose investors to “rapid and severe losses and undermine market confidence.”
In Washington, DC: the cold winds of Winter are blowing in the Oval Office windows…
Meaning they are staying out of it. Nothing illegal seems to have occurred.
S&P 500 on Thursday rallied back up through the 20-Day and 10-Day EMAs but finished the day below those marks and tested the 50-Day MA on Friday.
NAS Comp bounced off of the 20-Day EMA and through the 10-Day EMA. Then, it faded to close just below the 10-day EMA on Thursday. Then Friday it tested and finished on the 20-Day MA.
.What to expect this week
As I write this report at 8.40a ET the S&P 500 futures Vs fair value are +37.60 and the NAS Comp futures Vs fair value are +144.00.
The patterns for the benchmark US stock market indexes are set up for new money and so now investors are buying the dip.
The markets in Europe and Asia-Pacific finished up, so the S&P 500 and other major indexes can move back to record highs as the COVID-19 vaccines are distributed, shots given, and the Fed’s pledge to keep the petal to the metal to bolster and boost the economy is intalk. Low interest rates from the Fed acts as nitro for stocks and other investments.
The trend is North, and as we all know the trend is our friend and we will take what the market gives.
However, pay attention, the market can reverse on a dime, and remember it is your money and your responsibility.
Have a healthy week, Keep the Faith!