January 19,2024 – By now you’ve heard that the markets (in the US) are at all time highs. And that’s great, but keep in mind: “Where is the Risk? At the 52 week High or the 52 week Low?” Now, a new 52 week high doesn’t not mean that we are at the top and going lower, but as the market climbs / increases, so does the risk. Eventually it will catch up. (The goal of this last statement was to let some air out of our egos and keep things “real”.)
Just to give you a “heads up”; the end of January has some pretty significant events:
1/30 Federal Reserve Meeting. All eyes & ears will be on this projecting event.
1/31 Treasury Department releases its funding goals for the quarter; the amount & maturities.
2/1 Apple earnings. A big part of the “magnificent 7” tech stocks and a bell weather.
Make no mistake, this market is fixated on interest rates, earnings and consumer strength. So, these events will be carefully analyzed. Until then, I present the chart of the NASDAQ Composite Index:
Click on Chart to Enlarge it
Not surprising, Technology stocks continue to lead the way higher. The red circle at the upper right column shows the relationship of Fridays Close to the indexes 52 week high. These stocks are “expensive” in relationship to their price and their current earnings (P/E ratio). As long as earnings growth is evident, there’s no problem, but if current or forward earnings are presented as slowing, that IS a problem.
The Short-Term Sector Strength table is shown below –
January 5, 2024 – OK, this market was waaay overbought and due for a pull back. As I pretty much expected, 2023 profits were harvested at the beginning of 2024 (delaying taxes for over a year) along with the standard profit taking in an overbought market. Now the question is how much farther down and into what sectors / stocks will that money flow?
Monday should bring some selling and then consolidation (I think). Later in the week we may see some select buying. But lately Bonds have been inching down (higher interest rates) and the US $ also moved higher. Ideally, I’d like to see Bonds higher and the US$ lower. Those two would re-stimulate the US market and signal a return to previous highs and higher.
I’m seeing what might be the beginning of the end of this pullback; Caution. Sectors that are currently strong are generally defensive so keep an eye on those Bonds, US$ and sector rotation back into growth. The small cap Russell 2000 Index and the NASDAQ 100 will be the confirmation of back to “Risk On”. Until then “Patience is a Virtue”. The Short-Term Sector Strength Table is shown below. –
Cheers and Wishing all a Happy and Health New Year. (Make no mistake, 2024 will be a bumpy ride.)
Special Risk Capital Management LLC 
At the High: but What’s “On Deck” January 20, 2024
Posted by Tom in Thoughts.Tags: investing, market analysis, market commentary, Stock market analysis, stock market commentary, technical analysis
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January 19,2024 – By now you’ve heard that the markets (in the US) are at all time highs. And that’s great, but keep in mind: “Where is the Risk? At the 52 week High or the 52 week Low?” Now, a new 52 week high doesn’t not mean that we are at the top and going lower, but as the market climbs / increases, so does the risk. Eventually it will catch up. (The goal of this last statement was to let some air out of our egos and keep things “real”.)
Just to give you a “heads up”; the end of January has some pretty significant events:
1/30 Federal Reserve Meeting. All eyes & ears will be on this projecting event.
1/31 Treasury Department releases its funding goals for the quarter; the amount & maturities.
2/1 Apple earnings. A big part of the “magnificent 7” tech stocks and a bell weather.
Make no mistake, this market is fixated on interest rates, earnings and consumer strength. So, these events will be carefully analyzed. Until then, I present the chart of the NASDAQ Composite Index:
Click on Chart to Enlarge it
Not surprising, Technology stocks continue to lead the way higher. The red circle at the upper right column shows the relationship of Fridays Close to the indexes 52 week high. These stocks are “expensive” in relationship to their price and their current earnings (P/E ratio). As long as earnings growth is evident, there’s no problem, but if current or forward earnings are presented as slowing, that IS a problem.
The Short-Term Sector Strength table is shown below –
Have a good week & Take Care. ……………. Tom ………………
Price chart by MetaStock; table by http://www.HighGrowthStock.com. Used with permission.
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