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- Flirting with the Top
Flirting with the Top
BraVoCycles Newsletter
February 15, 2024
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Market Summary
The market “behaved” the last few days. Some indexes, like SPX, rebounded to almost the last high, so a new high is not out of the question, especially since the 5D cycle in SPX and NDX produced targets around the last high.
OPEX on Friday may bring the usual volatility, so stay nimble if you are a day trader. SPY closed today above 502, and options max-pain for SPY for Friday is 497, a 1% down. But Max-Pain does not have a stellar record in my experience.
Despite some dilemmas about micro EW counts and very short-term cycles, the intermediate-term picture is pointing down, as we mentioned already in the last couple of newsletters. Raising cash on strength is a good strategy for such a market environment.
The Big Picture
The figure below shows the NDX to DJI (INDU) ratio in the top window. This is an indication of extreme overvaluation of NDX, in large part caused by the relentless rise of Magnificent 7. The ratio values in late 2021 and now exceed the one at the 2000 stock market peak after which NDX corrected about 85%.
Reversion to the mean should happen now also, and it could take one or more years; we shall see. But it is reasonable to expect that NDX will correct much more than DJI.
Short Term Cycles
The 2-day bounce brought the indexes back to overbought levels. They are now “allowed” to go down, although another push higher on the OPEX day on Friday is possible.
Buzz on the Street – Liquid Natural Gas
Our premium content commodities section has a deep analysis of the Natural Gas (NG) today. Check out what is in the cards for NG.
Interview for Kerry Lutz’s Podcast
Kerry Lutz, the editor of The Financial Survival Network and The Inflation Cafe’ newsletters, has interviewed many famous stock market analysts and strategists for his podcast in the last 13 years. This week was my turn. Watch the interview here:
eBook: 3-Year US Stock Market Outlook
I wrote this incredibly insightful eBook about the current state of the US stock market and its trajectory for the next 3 years. If you are interested in the stock market, I want you to read it. To get it for free, all you need to do is share this link with your friends, or on social networks, who are also interested in the stock market and would likely subscribe to our free newsletter.
Share the link below with your friends and family, and if 2 friends subscribe to BraVoCycles Newsletter using your link, as confirmed by Beehiiv, you get our 3-Year US Stock Market Outlook eBook! We’re excited to share more of our content with your friends and family and the cutting edge technical analysis in our eBook with you.
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