Stocks have experienced a shaky beginning in 2024, with initial losses followed by slight gains on Thursday. ⚠️ Trading tips: looking at NVDA calls above 480 and puts below 475 after NFP data on Friday.
Took the calls as posted yesterday? 🤩
Marc Chaikin, founder and CEO of Chaikin Analytics, believes that this current pullback does not signify an end to the rally that began in late October.
Chaikin highlighted his perspective, especially for the 493 stocks in the S&P 500 that fall outside the realm of the so-called Magnificent Seven tech giants. He pointed out that this period could be particularly significant for these stocks, suggesting potential opportunities outside the tech sector.
Chaikin puts this in context by explaining that on Tuesday, when the S&P 500 fell by 1%, there were more stocks that gained than stocks that lost. Because of the huge weighting of the Mag7 — Amazon.com Inc (NASDAQ:AMZN), Meta Platforms Inc (NASDAQ:META), Nvidia Inc (NASDAQ:NVDA) et al — the market was lower.
“If you’ve taken profits, you’ve got to look for the opportunities to get back in to the market,” Chaikin said. He believes that there’s more upward potential for the markets, anticipating that the S&P 500 will not only breach its all-time high but will also continue to climb further. He observes a technical analysis tool called the McClellan Summation Index which, on the S&P 500, has moved over 1,000.
“This index only gets over 1,000 at the beginning of bull markets — not in bear markets, and not at the end of anything. So that’s telling you there’s a lot more upside,” Chaikin said.
“It summarizes the mood of the market and the flow of funds into stocks,” he added. “In the S&P 500, the Summation index went to a level that’s only been seen one other time. And in this case, you can’t take a contrarian view to that.”
S&P 500 ranks as 6th best month in January 😉
The Nasdaq 100 index has just closed its fifth consecutive red session, marking the worst negative streak for U.S. tech stocks in almost 14 months.
The downturn began on Dec. 28, 2023 when the Nasdaq 100 hit all-time highs of 16,696 during the session but closed down 0.05%. Since then, there have been only negative closures, culminating in Thursday’s session. The Nasdaq 100 has lost a total of 4.1% over five consecutive sessions.
The last time such a negative streak occurred was between Oct. 5 and 12, 2022 when the Nasdaq 100 experienced seven red sessions.
The primary contributors to the Nasdaq 100’s negative streak are the shares of the “Magnificent Seven”: Apple Inc. (NASDAQ:AAPL), Microsoft Corp. (NASDAQ:MSFT), Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL), Amazon Inc. (NASDAQ:AMZN), Meta Platforms Inc. (NASDAQ:META), NVIDIA Corp. (NASDAQ:NVDA) and Tesla, Inc. (NASDAQ:TSLA).
Together, these seven stocks, which account for nearly 35% of the Nasdaq index, have lost an average of 4% in the last five sessions, with Tesla, Apple and Amazon down by almost 6%.
10% gain in 10 mins after opening bell 😎
Overall, the market value lost by the Magnificent Seven in the past week amounts to $456 billion.
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