Major market indexes remain near recent highs as the NASDAQ Composite and the S&P 500 test their late July highs. Surprisingly, it has been the narrow 30-stock Dow index that was the first to break out to higher highs. That occurred on Thursday as the index diverged sharply from the other major market indexes.
Meanwhile, some cracks are starting to show up in some of the mega-cap tech leaders, such as Nvidia (NVDA), which we reported on yesterday as a late-stage failed-base (LSFB) short-sale set-up in its potentially initial phase. The stock was already a double-top short-sale (DTSS) entry at the 502.66 left-side peak in the pattern, as well as a Livermore Century Mark short-sale entry at the $500 level after earnings , as we pointed out in real-time during the live market webinar two Wednesdays ago. On Thursday NVDA triggered a third short-sale entry as it broke below its 20-dema. That constituted a short-sale entry using the 20 -dema as a covering guide.
Similar breakdowns were seen on Thursday in big-stock NASDAQ names Broadcom (AVGO) and Meta Platforms (META) as both stocks triggered short-sale entries as they broke below their 20-day exponential moving averages. Rallies by either back up into 20-dema resistance would bring them back into short-sale range, as was the case with AVGO on Friday. So this can be watched for in META depending on how it plays out from current levels.
Alphabet (GOOGL) was reported on as a short-sale set-up on Thursday as broke below the 20-dema. That triggered a short-sale entry at the line which now becomes a covering guide as GOOGL sets off a potential LSFB in motion. Rallies back up into the 20-dema would bring GOOGL back into optimal short-sale range so can be watched for.
Overall, the action on Thursday and Friday gave the impression of a rotation out of mega-cap tech and into other areas of the market. As Bitcoin ($BTCUSD) breaks out to higher highs we note a corresponding pocket pivot move in Microstrategy (MSTR) on Friday as it starts to emerge from a three-week flag formation. This may be best bought as close to the 10-dma as possible but remains within buying range using the 10-day line as a selling guide.
Industrial metals names were also moving, with big-stock aluminum Alcoa (AA) posting a pocket pivot breakout on Friday. This is best bought closer to the 10-dma where the move originated on Friday morning as AA now sits about 4% above the moving average. Watch for any opportunistic pullbacks to the 10-dma or the 20-dema as potentially lower-risk entry opportunities.
The Market Direction Model (MDM) switched to a BUY signal on Monday, November 27th.