I'm back from a few days away and boy do we have a lot to discuss.
I hope you enjoyed the guest posts over the past week from some of the key members of our team.
It's good that you get to know some of the other guys so you don't think I'm just some crazy guy who looks at a million charts. There's a lot more to it than that, and hopefully that came across this week.
But first thing's first. This is a bull market for stocks and people seem to be running scared. They're freaking out.
Premium Members of ASC Research get access to 2 of these each month. This is what you're signing up for. This is where you want to be. This is where you get the perspective. And this is where the best ideas are derived.
In the meantime, I have 3 charts for you to help put everything you're seeing into context.
These are America's 3 most important stock market indexes with all their key levels. The first one is the S&P500, marked up with the Fibonacci extensions for this entire bull market.
If you're wondering where these Fibonacci Extensions come from, we discuss the arithmetic and strategy behind these levels in our 12-week Mastermind put together specifically for Premium Members of ASC Research. You can access those here.
The idea is that if we're above those July highs, near 560 in the $SPY then the series of higher highs and higher lows is still intact, and the bull market is not in question.
The Nasdaq100, on the other hand, is working on a potential failed breakout, so its definitely worth monitoring.
Again, like the S&P500, if the $QQQs are above their July highs, then there's nothing to be overly concerned about.
But we're getting close. So keep an eye on this one:
A failed breakout doesn't necessarily mean that a new bear market is beginning, or even that the bull market is over.
But a more messy environment where different types of strategies may work better will certainly be a priority.
That 500 level is a big one for $QQQ. If we're above that, then "all is well", to quote Kevin Bacon at the end of Animal House.
And the last one is the world's most important stock market index, the Dow Jones Industrial Average.
Like the Nasdaq, this one is close to key levels, which merits extra attention.
Those July highs come in just above 41,000 and the 161.8% extension is right near 42,000. That's the zone.
Higher highs and higher lows is the definition of an uptrend. If/when that is no longer the case, then that "uptrend" is no longer intact and we need to act accordingly.
Sector rotation has dominated this bull market. And as always like to remind you, Sector Rotation is the Lifeblood of a Bull Market.
Will we continue to see that rotation into the beginning of next year? Or was that it?
We're watching High Beta specifically, which is dominated by Technology and Consumer Discretionary stocks.
The underperformance in Healthcare and Real Estate aren't the biggest concern. It's the High Beta stuff that needs to hold up.
We'll be discussing all of this on Monday, and more importantly what we're doing about it in our portfolio strategies.
You're going to want to be there.
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