The NDX is not singing Christmas carols instead it is singing its swan song. Everybody and his brother are leveraged long the stock market especially tech stocks. The young tech workers have lots of bucks so they are buying tech stocks. Joe Sixpack heard a guy on television telling him to buy, buy, buy, so that is what he did. Carlos Bagholder said his broker told him to go double-leveraged long in AI stocks and chips. It is funny stuff.
Look at the chart, idiots. Can't any of you read a chart? No, you can't. That is why you are here. The NDX is the top hot tech stocks in the market that have driven the broader stock market to historic record highs this year. The AI hype along with government and Fed largess reward America's wealthy class, that own the stock market, with riches beyond all their dreams. Well, the party is ending and it would be best to leave now before Cousin Larry barfs on your shoes.
The red rising wedge is a bearish chart pattern. Price moves into the apex, like now, and then collapses. As price prints matching or higher highs over the last month, the red lines for the indicators clearly show universal negative divergence across all indicators. She's cooked. The MACD line is trying to squeeze out some remaining fumes that may help price remain buoyant for the last 4 days before 2025 begins, but the neggie d should not be ignored. Divergences are the most powerful force in technical trading.
The stochastics are overbot agreeable to a selloff ahead. The blue circle shows the smart money selling their high-flying tech stocks like gangbusters. Comically, Joe Sixpack and Carlos Bagholder are eager to get in on the hot action and are buying the stocks the institutions are selling. Sucka's. Why would you buy something when the guy is selling it to you and then planning to sneak out the back door?
Price violated the upper standard deviation band so the middle band, that is also the 20-wk MA, at 20363, is on the table, and also the lower band at 18.6K. The pink boxes for the ADX show the strong trend higher in price in 2023, that petered out, then reasserted itself early this year, but petered out bigtime, and even though price grows to the sky, the ADX is screaming that it is not a strong trend higher and caution is required. The rally floats higher on hype.
The Aroon red line shows that 80% of the tech bears are now bullish and buying tech stocks. That is funny. The Aroon green line shows that all the tech bulls remain nearly 100% all-in on the long side. Everyone is on one side of the boat partying. Seriously, are you too stupid to not know what is going to happen going forward on a weekly basis?
The chart is a piece of crap and since it is poised to drop into a multi-week decline, that means the high-flying tech stocks will fall into ta multi-week decline. If you replace NDX with XLK you can see that it is the same chart. XLK is cooked and poised to begin a multi-week decline. Bring up the COMPQ weekly, the Nazzy Comp, it is same-o chart. It is over for tech, folks, on the weekly basis. A ba-dee, a ba-dee, a be-dee, dat's all folks.
The 18200 level is strong price support during the year. From 21800 down to 18.2K is about a -17% drop so a -20% drop-ish in NDX is a reasonable expectation moving forward on a weekly basis.
Keystone is not holding any XLK long or short right now but obviously the play forward would be short. Let's take a look at the daily and hourly charts to see if we can nail down the timing for the top. The XLK daily chart is in neggie d as it prints matching highs for the month. The shorter term charts are not telling much and it is the end of the year goofiness.
The Santa Claus rally is typically the day before Christmas Eve to two days into the new year thus, 12/23/24 through 1/3/25. The bulls, always anxious to buy any dips in this overhyped stock market, jump on the Santa train and are riding his fat arse into the new year, or so they hope. Santa's knees are shaky and may buckle at any moment.
It is not Christmas without Darlene Love belting out "Christmas (Baby Please Come Home)." She always had a powerful voice coming out of that small body. She sang it on Letterman each year starting in 1986. Fantastico. Nowadays, few small girls have that power. Jade Bird comes to mind. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
Note Added Friday, 12/27/24, at 4:17 PM EST: The session ends the day and week with NDX at 21473 sitting on the 20-day MA S/R at 21504. XLK ends the week at 237.54 sitting on its 20-day MA at 237.64. Yes, XLK must decide to bounce, or die. NDX must also make a bounce or die decision from this key moving average on Monday morning.
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