The Good, The Bad & The Ugly (2024)

Join me this Wednesday for a LIVE 3-Hour Technical Analysis Bootcamp.

This is the first time I've ever done anything like this.

• What is Technical Analysis?

• Why do all the biggest financial institutions in the world use it?

• How can you use it to improve your investing results?

Join me Wednesday Feb 21st @ 5PM ET.

(Yes it will be recorded and anyone who signs up will have access to the archived video and slides). Sign up here.

The most bullish thing I see out there for the stock market is the lack of new lows.

It's mathematically impossible for the stock market to get worse, go into a correction, or even think about the possibility of a bear market, without seeing an expansion in new lows first.

And we're just not seeing it.

The NYSE Composite went out last week at a new all-time high. And even the most short-term of new lows lists have yet to see any expansion.

There's nothing happening in the new 52-week lows list, obviously, so here are the new 10-day and new 21-day lows.

Still nothing...

What I like about this one is that it's just math.

There is no opinion here.

Mathematically, you cannot have a correction of any kind without stocks going down.

End of story.

Next up:

The Bad

What's bad about this environment is the fact that all these bearish divergences have been adding up.

As the stock market just entered, what is historically, one of the worst times to own stocks of the entire year, the new 52-week highs list has already dried up.

It peaked 2 months ago, and has been deteriorating with every new high you see in the S&P500 and Nasdaq (neither one closed at a new high this week).

US Treasury Bonds are falling off a cliff. When a $130 Trillion asset class is crashing, is your bet that it won't impact the stock market?

You're seeing Consumer Staples outpacing Consumer Discretionary stocks, which is what you normally see in the market right before a good rug pull.

And worst of all, the US Dollar is ripping. Over the past several years, when the Dollar is strong, stock are not.

The US Dollar is the only safe haven in this market. And Dollar Index Futures are up every week this year - 7 weeks in a row.

All of these, in my opinion, are definitely bad for stocks.

But the Ugly?

That's what's got me shorting more stocks aggressively this week.

Up next:

The Ugly

This market is losing its leaders.

We already discussed shorting Apple and Dell.

But even Adobe, arguably the most important software stock, is getting crushed.

The iShares Software Index Fund just got back to its former bull market highs from late 2021.

The most important stocks within the index are already rolling over. Do you think the index won't follow, especially after finally reaching its former highs?

If Software is falling, Apple and Microsoft are rolling over, and momentum is diverging everywhere, do you think the Tech Sector Index itself won't follow?

Remember, Technology represents 30% of the S&P500 and over 50% of the Nasdaq100 $QQQ.

That's why we're shorting both of them.

As a reminder, next Wednesday, I am holding a special one-day-only Technical Analysis Bootcamp (don’t worry, it’ll be recorded, and there are other actionable goodies in there as well) on TA:

1. How to use it

2. How we use it to identify turns in the market

3. How to find profitable trades at these turns

Wednesday will be LIVE hosted by me and we'll go hard for 3 hours.

Click here to join me next Wednesday February 21st @ 5PM ET.

See you in there!

JC