Just a quick Nasdaq update this morning as I think another major turning is near. The speed that stock bulls have returned is very impressive, and other analysts have noticed it as well. Even though the markets look bullish, they can fool us because they are just big bear market rallies.
Investors forget, don’t care or were not old enough to experience the 2007-2009 decline, but investors bought in at the peaks as well. So far it is nice to see a potential turning into another new month, which could turn February very bearish. In simple terms, bear market rallies always retrace themselves, back to the point of origin of December 2018! Any price dip below 5800 will work, but the Nasdaq will not just stop dead in its tracks, but March could end up being very bullish again. Lack of data is haunting the markets as even farmers are temporarily blinded due to back-log economic data. The problem with all that fundamental data (news) is that much of it is lagging and or manipulated.
Investors were surprised that the rate hikes may be taking a “pause”, but investors can take that as bad news, as a recession followed everytime they paused. Sure, many tech companies surged but Facebook doesn’t justify its move at all. FB developed a huge gap to the upside, and any gap has a 90% chance of getting filled. Since my Facebook account got hacked a few months back, I have started to reduce my digital footprint.
Apple has security concerns with its Facetime app and it seems that all smartphones are just spying tools.
Another bearish reason is the Gold/Nasdaq ratio. At 6.38:1 it’s an expensive ratio. This morning it was 5.25:1. There’s a long way to go down before the Nasdaq and other indices become cheap again.