After the release of the CPI data, the strength of the bulls has finally been released, and we saw everything rocked. $DJIA(.DJI)$ pops 1,200 points, $S&P 500(.SPX)$ jumps 5% in biggest rally in two years after light inflation report.
Wall Street is so smart! It opened high enough on Thursday that all those on the sidelines were afraid to get in.
If you are the investor who have been planning position long before, may also exit the market at the midway of Thursdays rise.
Will this rally last longer?
U.S. stocks jumped on Thursday, create a huge gap, if a gap that is not traded into for the next 3 days can lead to a move of 2+ weeks in the direction of the gap.
From a technical analysis point of view, $Invesco QQQ Trust(QQQ)$ 2-day technical infor whows a bottom divergence, bottom signal. The current medium- and short-term momentum is very favorable for long positions. Looking at the $NASDAQ(.IXIC)$ and $S&P 500(.SPX)$ at the 2-day level, it is the bottom of the bright card.
The Weakest Nasdaq $NASDAQ(.IXIC)$, also showing bottom divergence after Thursday's session, see futures ETF $Invesco QQQ Trust(QQQ)$
You can check more time period
Technically, the $S&P 500(.SPX)$ stepped back on an important multiple moving averages on Wednesday and pulled up with a long candlestick on Thursday. This isa very positive sign.
The S&P 500 gained 5.5% today, its largest % increase since April 2020 and 15th largest since 1950. One year later the market has often been higher following these large daily spikes (22 out of 24 times) with an average return of +31%. The 2 exceptions: Sep 2008 & Jan 2001.$SPX
So, I believe the overall trend is becoming more and more clear, the pattern is clear, I have no doubts to keep my holdings.
Through some other signals, we can also get some forward indicators:
1.Earlier this week, the PUT/CALL ratio was very exaggerated, and it may usher in a wave of rise.
2. $Cboe Volatility Index(VIX)$ dropped 9.8%,The Weakness in VIX past few weeks has been extreme!
Previously, according to history data, when the VIX fell, and the stock market was more tend to bullish. Currently, the VIX is around 23 area. Review: Not A One-day Rebound? 3 Reasons & Key Levels Discussion
3. Because the CPI data is better than expected, inflation concerns have declined, and institutions are expected to cut interest rates next year. The dollar index fell sharply on Thursday, and the dollar tends to move in the opposite direction of the stock market. $Invesco DB US Dollar Index Bullish Fund(UUP)$
4. In addition, the Bitcoin market has fallen sharply recently, and market confidence has been shaken, then the stock market will also become the choice of more people.
Therefore, I insist that now we enter into a wave of rise in midterm, not a precarious rebound. Assuming a fall comes, there is a high probability of a simple and short-term wash, and the main point is to go long.
The overall trend is becoming more and more clear, I have no doubts, and I have no desire to act rashly (will just keep my holdings).
$Invesco QQQ Trust(QQQ)$ $ProShares UltraPro Dow30(UDOW)$ $S&P 500(.SPX)$ $SPY(SPY)$ $TQQQ(TQQQ)$ $Semiconductor Bull 3X Shares(SOXL)$
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