Sunday Night Market Note

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There are times to press on the gas and trade heavy and times to go fishing and spend time with family and friends. At least in the short term, I'm in the fishing mode. Looking at the SPY we can see a well defined broadening pattern and potentially a topping pattern. Price is in that in-between area where trading less is more.

The equal weighted S&P 500, RSP, shows the divergence that has been happening for weeks very well. We don’t know if this is a top or a continuation pattern yet which is exactly why trading less and having more cash on hand makes sense to me.

The Financials are under the 50dma, semiconductors are right at it, transports are well below the 50dma, and housing is well below its 200dma.

This shows how weak the market has gotten under the surface. Looking at our dashboard, there is still a power trend intact, but new lows are outpacing new highs and breadth is weak.

Momentum is negative and the FOMO indicator is whipping back and forth. All this adds to our cautious stance.

The Dollar is going to be the most important chart I watch going into the new year. Further strength, especially fast moves, could be very dangerous to the market. Conversely, a sideways or down move would probably be bullish to the market.

This weekend we had a great live stream where we went over a ton of charts that were requested by the attendees. Here is the link if you missed it.

https://youtube.com/live/WNtubNMHPBE

The Subscriber video went over a more detailed market outlook, what I’m expecting in 2025, and our extended watchlist. Here is the link if you missed it.

We drilled down to the best names I could find to start this week. The focus list video goes over how I plan to trade them with my entries, stops, and potential targets. I will only enter if they trigger. Here is the link.

It’s okay to say there are mixed signals and it is better to wait for a more defined trend. I think that is exactly where we are at in the market.

Any trade I put on will be very small in size with a hard stop. Bullish markets will forgive imperfect entries and trading, choppy to bearish markets will make you bleed.

This is the time to take a step back, watch the action from the sidelines, and wait to pick your spot. Happy New Year! Take care. -Jack

These are all the symbols from this week’s watchlist:

APP PLTR IONQ TWLO BROS AS DXYZ CRDO MRVL DOCU NVCR CFLT REAL RGTI CIEN ACHR RCAT QBTS SMTC KVYO QUBT TEVA DOCS AAOI GRAB ASAN INOD TIGR RBLX NVDA ALAB MSFT GOOG SOUN RBRK RKLB LUNR SOFI HOOD RUM RDDT OKLO SMR TSLA