Special Bulletin: May 15, 2024 (10am Update)

Up on Higher Volume with No “Vertical Violation” Means “Green” Skies 

Volume finally showed up yesterday and on an up day! Last week we wrote, “Up volume is to a bull market in stocks what oxygen is to your lungs. Without it, you can’t last for long.”

This morning the sub-peak pattern we wrote about has been negated and the market is beginning the day on a strong note with broad participation. This action is confirming yesterday’s signal upgrade to a green condition. Positively, the major indexes continue to hold above their respective 50-day mav’s and are now pushing through prior overhead price resistance.

Our Current Market Outlook was upgraded to “Market in an Uptrend” with a green light as of 4pm on 05/14/24 with the SPX @ 5,246.68). The general stock market indexes are holding their 50-day mav’s and volume is finally confirming. Our Core Four has moved to 2 green and 2 yellow lights with a VIX that is well under its own 50-day mav.

While volume is increasing, an official “follow-through day” has not yet happened. However, our C.M.O. was upgraded yesterday to green based on higher volume and the Nasdaq’s all-time closing high coupled with the number of days the major indexes have held above their 50-day mav’s. Today is Day 18 of the rally attempt – still within a reasonable, but not ideal, time frame for a confirming FTD signal according to the Investor’s Business Daily methodology.

In our last post we also shared this: “Finally, concerning the use of the word “crash” in the title, suffice it to say we don’t have any special insights that one is eminent. We know the odds are small – we get that. However, what we have discerned is that if the market fails here, and the “sub-peak” pattern materializes and gives way to a “vertical violation,” the chances of one increase significantly. What’s the antidote? Higher prices with higher volume produce “green skies” and maybe, just maybe, a “soft landing?” Well, the rally attempt didn’t fail and that antidote arrived, and the higher prices on bigger volume have negated the above threat.

“For I know the plans that I have for you,’ declares the Lord, ‘plans for welfare and not for calamity to give you a future and a hope.” Jeremiah 29:11 NASB 1995

Game plan: Be mindful of any price reversals on the main indexes that drop back to the 50-day mav’s with higher volume in the days ahead. The economy is slowing and as such stocks may stall, but until then “the trend is your friend.”  Pray for the peace of Jerusalem (Psalm 122:6-7). May they prosper who love her.

Note: You can learn more about The Triumphant Core Four risk management system by clicking here.

Have a Triumphant day! ®