Special Risk Capital Management LLC

Confirmation of a Breakout ? November 26, 2022

Nov. 25, 2022 – This was a short week with very light holiday volume, so I’ll get to the point.  Note the chart below of the NASDAQ Composite Index.  I’ve drawn in a linear regression line with a +/- 2 standard deviation channel.  The linear regression line is basically the graphical average between the last peak in mid-August and the last low in early October; half of the “area” (time & price) is above and half is below.  Think of +/- 2 standard deviation channel as an “expected move” within that time frame of “typical”.

The blue ellipse shows a breakout from that “expected move” and thus a possible change in character / trend.  But . . .we haven’t seen that follow through yet.

All eyes will be on economic news in the coming 2 weeks:

12-1:  the PCE report (Personal Consumption & Expenditures)  

12-13:  the CPI report (Consumer Price Index)

12-14:  the FOMC / Fed meeting

For those trying to front run the economy, interest rates and inflation, these are the ones to possibly show a change in behavior.  Until then the strength / weakness in the US Dollar and Treasury Bonds will provide some indications of where the money is wagered.  Nuff said.

Have a good week.         …………  Tom   …………..

Price chart by MetaStock. Used with permission.