SPX / NQ - Bull confirmed (ok nothing is 100%)

2 февр. 2023 г.

I wrote on Jan 18 that SPX had been looking "optimistic" technically as there were several factors favoring the bulls.

After FOMC meeting yesterday, the bull case has now received further affirmation:

1. Both SPX and NQ are now above their 200 day moving averages
2. Both have broken above a long term trendline resistence
3. SPX is about to "Golden Cross" (ie 50day MA crossing above 200 day MA)
4. SPX has also broken above it's diamond shaped formation
5. Rotation has been back into tech stocks in the past week with Big Techs gaining solid ground

Prior to this, I have mentioned several times that many stocks were forming basing patterns (rounding bottoms, inverse head and shoulder, Adam & Eve) etc. There were several false breakup at the beginning but lately there were more stocks that had golden crosses and with successful breakups.

Many people were looking at the "tree" (in this case the indices eg SPX or NQ) but forgotten about the forest (a whole bunch of stocks which were exhibiting basing patterns, although they still took months to confirm a breakup). Forget the noise, trade the technicals. Keep things simple

We could have pullback in the coming days, but as long we have higher lows or above the 50 or 200 day moving averages etc, the bigger trend is still up. Until these are negated, the risk-reward favor the bulls right now.

p/s not saying to jump blindly into stocks right now (if you haven't done so) but look for those with good entries (either momentum breakup or buying the dips for stocks already trending).

Disclaimer: Just my 2 cents and not a trade advice. Kindly do your own due diligence and trade according to your own risk tolerance and don't forget that money management is important! Take care and Good Luck!