April 10, 2021

STOCKS – NONE

MACRO – SPY, QQQ

Mike’s Reading The Markets (RTM) Premium Content – FREE 2-WEEK TRIAL

• T.W.A: The Week Of April 12 Is Likely To Be Harder For Stocks
• Midday Note- Setting Up For A Rug Pull
• Live Webcast Tomorrow At NOON
• Morning Note – Here To Pump You Up
• Midday: Stocks Stall As Fed Minutes Reveal Little
• Morning Note -Growth Sell-Off May Not Be Over
• Midday- Inflation Expectations Fall
• Morning Note: Despite Index Level Gains, Very Little Has Changed

Anyway, another interesting week is upon us, and it isn’t often that we find the S&P 500 overbought, using the RSI and Bollinger bands on a Daily, Weekly, and Monthly basis all at the same time. But that is exactly the case. Also, in this week’s video for members of Reading The Markets, I review why I think the level around 4,130 on the SPX appears to offer a lot of technical resistance. (Premium content on SA Marketplace – T.W.A: The Week Of April 12 Is Likely To Be Harder For Stocks)

Daily

Weekly

Monthly

The chart below shows the S&P 500 now at the 1.618% extension from peak to trough of the March 2020 decline.

There is also this chart that shows the 4,125 area as a 38.2% extension from the March low to the September peak.

This log chart shows the trading channel that has been in place since the 1920s and has only been violated 2 times, the late 1920s and the late 1990s. We are the very upper end of the channel right now.

I stumbled upon this too, when I was looking at previous periods. I noticed the double bottom shape in April and May of 1987, which made me wonder what would happen if I overlaid 1986 and 1987 with 2020 and 2021. I got this…

I will tell you this the period of June 2020 until March 2021 is incredibly similar to November 1986 to October 1987. History may not repeat in the chart below, but it sure does rhyme.

Finally, the market’s momentum is undeniable. Still, it appears to be occurring with fewer people participating, which means the market is not nearly as strong as it would seem, especially on the NASDAQ. It either suggests that sellers have taken a vacation and decided to let the buyers pay up, or there is a serious buyer exhaustion case.

Anyway, that’s it for this week! I just thought I would change it up. Certainly something to think about.

-Mike