Following the price U&Rs in the major market indexes two Fridays ago after they all undercut and rallied back above their early October lows, the indexes have continue to rally. They finished Friday's short post-Thanksgiving trading session with a fifth straight up day in what is a severely wedging rally that normally would be failure-prone. However, with all of the indexes back above the 50-dma, that now becomes support and any pullback towards the line will give some indication as to just how meaningful the five-day reaction bounce is. We maintain an open mind in this regard, particularly with a steady, heavy stream of catch-up economic data coming down the pipeline in early December and the Fed policy announcement two Wednesdays from now.
As most big-stock techs bounce off recent lows, the situation remains mixed. Former AI darlings
Advanced Micro Devices (AMD),
Nvidia (NVDA),
Oracle (ORCL) and
Palantir (PLTR) all remain well below 50-dma support while ORCL is now living below the 200-dma. All this despite the five-day rally in the indexes off the lows of two Fridays ago.
The names above contrast sharply with other big-stock techs like
Apple (AAPL),
Applied Materials (AMAT),
Broadcom (AVGO) and
Alphabet (GOOGL), for example. Each of these stocks is either at or near to all-time highs with AAPL and AMAT within buying range of all-time highs.
The big story of the week was the big rally in silver at the iShares Silver Trust (SLV) gapped to all-time highs on Friday as Spot Silver ended the week at $56.37 an ounce, a new all-time high. Technically, the SLV remains within buying range of Friday's cup-with-handle breakout.
Meanwhile,
Spot Gold cleared the $4,200 level and closed the week at $4,216.71 an ounce, its highest level since it began correcting in mid-October after posting its own all-time high at $4,381.58. The SPDR Gold Trust (GLD) reveals a six-week consolidation for gold that has the look of a small cup-with-handle. For now, silver is the leading precious metals. and its recent strength may imply a breakout to new highs in gold coming sooner than later.
Bitcoin ($BTCUSD), which has corrected far more than stocks have, remains 28% below its all-time highs as it bounces back towards 20-dema resistance. Currently, there are no actionable long entries in King Crypto, while it could be argued that the 20-dema represents shortable near-term resistance. However, given the downside extension in $BTCUSD we do not tend to think there is a lot of immediate downside left to make it worthwhile, and any year-end rally in stocks as we move into December could lift all boats, including $BTCUSD.
We remain cautious as we see where the five-day wedging index rally takes stocks, but for now we can identify areas of strength and areas of weakness that make for a very mixed picture currently.
The
Market Direction Model (MDM) remains on a sell signal.
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