Algo's Run Wild Taking Stocks Back To The December 19 Breakdown

Algo’s Run Wild Taking Stocks Back To The December 19 Breakdown

This column is my opinion and expresses my views. Those views can change at a moments notice when the market changes. I am not right all the time and I do not expect to be. I disclose all my positions clearly listed on the page, and I do not trade my account on the stocks spoken of in this column unless fully disclosed. If that does not work for you stop reading and close the page. Do not bother me or harass me.

Otherwise, enjoy the column!

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The stock market posted monster gains on January 4 after the strong jobs report, and FOMC Chair Jerome Powell noted he would be patient when raising rates. The result was S&P 500 that increased over 3.4% and a NASDAQ that was up over 4%. The price action was awe-inspiring, make no mistake the machines are running the show! The charts below are stunning, and all have one thing in common December 19! I wonder what was on December 19.


The jobs data was very positive, and what I thought was even better is that workers are coming from the sidelines and re-entering the labor force. If this trend continues, then that unemployment rate will continue to climb. How can the Fed raise rates if the unemployment rate is rising? It can’t.



The 10-year had a big move higher today by ten bps and back to 2.67%! Yeah, that is how low it has gone in the last few weeks. yields

December 19

The bad news is that we are just a touch higher than where we were on January 2. The bigger problem is that index closed at 2,531, which is the resistance level from the big December 19 break down and previous February low. This is a massive level for the S&P 500, and I must admit that today’s rally although impressive failed to get above this level. So I think caution is needed until we can firmly rise above this level.

spx, sp500


The Russell 2000 stalled around significant resistance at 1,375 and the sets up a showdown at 1,394. But notice 1,375 was the critical level that broke on, you guessed it, December 19.

russell 2000


You think it is a coincidence that NASDAQ stalled out around 6735 today? I don’t. December 19 breakdown as well.

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Oh, look the Housing HGX index also stalled out at 253, its level on, December 19!



The XLY consumer ETF also stalled at its December 19 level.


The price action today was that of the machines, and they once again proving they are very much in charge. It is not a coincidence that so many of these ETF’s and Indexes stalled out the levels of December 19, the day the of the FOMC meeting. It sure setups an interesting Monday!


Netflix had a big break out today and is now at $300, and a rise above $300 takes it back to around $330. Maybe I’m biased but I think this one does break out. The #birdboxchallenge says Netflix found something hot with this movie.

netflix, nflx

The term Netflix subscription is off the chart on Google Trends




Roku could be on its higher way towards $38, and perhaps $43. It must be the Roku Channel.

It’s Friday more this weekend!

Photo Credit Via Flickr

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