Bulls Beating Bears
Last week I pointed out how a tussle around the 200-day moving average should be expected, the bulls made a stand and after a brief undercut sent the Nasdaq soaring. For the week the Nasdaq gained 2.58% and closed right at its highs. What makes this more impressive is the weekly volume, which came in above average and well above last week’s levels.
After the back-and-forth fight, not only did price close above all key moving averages but the 200-day moving average has begun to turn and is now rising. On top of that, we could see a golden-cross the weekly chart as soon as next week, with the 10 week moving average crossing above the 40 week.
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Next week do have some potentially market moving economic reports coming out such as the JOLTS and employment rate, while we also have Fed Chairman Powell testifying before the senate and the house. It will be critical to see how not only the indexes react to these events, but also the dollar, interest rates and the vix.
The dollar sold off this week, however it doesn’t look broken yet as it is still above the 21 and 50 day moving averages.
The 2 year yield also attempted to breakout to new highs this week as it briefly surpassed the November 4th high. A failed breakout here would be what the bulls want to see.
The Vix broke down this week as it closed back below all of its moving averages with the shorter 8 and 21 exponential moving averages crossing below the 50 day.
While the indexes pulled back over the last few weeks into the beginning of this week, one thing that stood out was the way potential leading stocks had acted. Many had pulled back on light volume and had tightened up in price setting up nice pivot points.
One stock that I want to focus on and I think any growth investor should be at least watching is MELI.
To start, MELI has absolutely superb fundamentals with the last quarter’s earnings per share coming in with year-over-year growth of over 450%. Sales also continue to accelerate and see consistent growth.
From a technical perspective, the chart shows a ton of accumulation and now has a perfect 5 week 13% deep flat base after rallying over 50% in January.
Pine Script
In addition to my regular market analysis, I wanted to let my readers know that I've added a new section to my Substack focused on Pine Script. My goal with this is to provide simple and basic Pine Script lessons that anyone can understand, as well as continue to improve my own coding ability. If it is something you are interested in, you can check out my first post below.
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The content presented is for informational and educational purposes only. Nothing contained in this newsletter should be construed as financial advice or a recommendation to buy or sell any security. Please do your own due diligence or contact a licensed financial advisor as participating in the financial markets involves risk.