Happy “follow-through” day? It is too early to tell yet (as of 1:30p) but the stock market has a great start to the day and may confirm at the close that a new rally phase has emerged today. And not a moment too soon!
Yesterday we wrote, “As this post’s title states, it is “do or dive” time for the stock market. The market has positioned itself into a snug technical set-up that should lead to a sharp move (in either direction) in short order. And tomorrow’s employment data will likely act as a significant catalyst.” So far, so good. We will know more at the close.
Our Current Market Outlook is being upgraded to “Uptrend Under pressure” with a yellow light as of 1:30p with the S&P500 at 3,875.57. With the action so far today, our “Core Four” (see top of page) has improved to only 1 red with 3 yellow lights. (New lows have contracted and the major indexes are in position to overtake key moving averages- institutional footprints are beginning to improve.)
The “higher low” technical chart pattern we have written about extensively is trying to make itself felt. Much like when Buzz Lightyear “flew” and landed in front of Woody and proclaimed “Can!” the stock market is saying “Do!” (See yesterday’s post here for our reference to Do.)
While today’s action is nice and may indeed lead to a meaningful rally (if not a full blown bull market phase), it is much too early to “bet the farm.” If a new growth phase is dawning, it will take weeks to really get going and it would likely yield many opportunities for patient and wise investors. The key will be for the major indexes to rise over their 50-day mav’s and to hold that level. In the event that an official “follow-through” signal happens today, it will then be imperative that no distribution days develop in the first 3 days after the follow-through day confirmation. (See IBD’s excellent work on this topic here.) Keep your eyes focused on early next week as the Q4 earnings season ramps up.
Game plan: Begin to deploy capital in the strongest areas on your watch list- but remain cautious and alert. Study next week’s price and volume action on the major indexes and watch to see if they move up through their 50-day mav’s and hold above those levels.
Happy new year again, and welcome 2023! Praise Jesus for another year!
Note: You can learn more about The Triumphant Core Four risk management system by clicking here.
Have a Triumphant day! ®
The information in this article is based on data obtained from recognized services and sources and is believed to be reliable. Any opinions, projections or recommendations in this report are subject to change without notice and are not intended as individual investment advice. Not to be used as legal or tax advice. ©2023 Triumphant Portfolio Management, LLC.
Where Are Woodward and Bernstein When We Need Them? This article was written by Newt