"This Will Be A Big Week"

Do we just say that every week? Are we kidding ourselves here?

Maybe. But I don't think so.

I really think there are some VERY important resolutions coming hard and fast.

First is the ability for the S&P500 to hold above those September highs. 4500 is the line in the sand there. Bad things happen below that.

Our amazing Technical Analyst Rashmi calls them the Dow Twins. I always loved that. They're both right at their important risk levels, which are their May highs. Bad things happen below that.

The US 30yr yield below 1.75% and US 10yr Yield below 1.4% are a problem. Bad things happen below that.

And finally it's the Regional Banks and Mid-caps. That's the best story of the internals, as far as I'm concerned.

We went over this last week on our December Strategy Session. Premium Members can watch that here and download the slides. Our next live video call will be early next week. I'll follow up with an invite for that shortly.

The bearish momentum divergence there doesn't help the cause. Again, if the S&P500 is below 4500 bad things can and likely will happen to stock market HODLers.

The bottom line is this. If Mid-caps and Regional Banks are above their Spring highs, WE HAVE TO BE BUYING STOCKS.

If I feel confident about anything in this market it's that.

I can't think of anything more important that I'm watching here.

It's these two above: $KRE and $MDY

But I think it's all going to come down to rates. I'm not going to bet that these two are doing well if US Interest Rates are collapsing.

Here are 30s and 10s. If we're below 1.75% in 30s and 1.4% in 10s, bad things can and likely will happen to stock market HODLers:

We're talking about some pretty gnarly binary outcomes here.

I don't think we should expect anything but an explosive move in prices all over the globe.

Can they dig in?

Can the Dow Jones Transportation Avg stay above that critical 16,000 level?

How about the Dow Industrials?

Can they hold that 34,500?

We'll know this week!

Pay attention.

I'm telling you.

Stocks

Last week we talked about Homebuilders breaking out to new all-time highs, and if that was the case then how could this be a bear market?

I can say the same thing about these two, which are grouped together in those sectors.

Both of these names are on our buy list. $HD and $LOW need to be owned if this market is going to hold and rip into the end of the year.

Premium Members can access the entire Hall of Famers Report here. These are the largest 100 companies in America sorted by strength:

You can see which sectors stand out up here.

But one area specifically within the Industrials is the Railroads that stand out most.

$CSX has been a buy for a us and still rocking despite any pick up in overall stock market volatility.

These are the names that stand out.

But if stocks are going to go, we'll start to see a pick up in the new highs list and overall industry groups making new highs.

Those are the ones we're going to want to buy.

Stay tuned..

JC

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