Euphoric exuberance all around The markets have been in a very buoyant mood lately. And calm despite the macroeconomics. That just makes me more cautious. Despite overbought levels and market worries as well as bearish sentiments, the market keeps driving up. Now, sentiments have turned bullish and many are saying the markets have entered a new bull market. Really? I beg to differ. In fact, the markets have all the hallmarks of a top. 1. Narrow breadth. Only 6 or 7 megacaps lead the market. This must be one of the thinnest 'bull market' ever! 2. The equal weight broad market market index is trending down. The divergence from the normal broad market index cannot be understated. 3. The market have never bottomed so way ahead of the Fed's final rate hike. And they may not be even done yet!

I love you 5000? The markets have entered a bout of volatility at around these levels and time period. Euphoria is in the air on the back of new highs achieved as well as the narrative of a soft landing really catching hold. Data supports this soft landing approach and that is why I am still putting that on the table to be pragmatic despite my gut feelings telling me that a recession is still a big possibility. Inflation is however the cat in the bag and that shows with the market sell off with the slightest inclination that inflation is not done and dusted.  The market picked itself up rather well however post that sell off to rally back strongly with the broad market index reclaiming 5000 in the process. So where are we heading in the midst of this up and down? I have advocated

Is Tesla a buy at these levels? Tesla flirted around 150 levels in its recent sell off before finding its footing and rebounding to the 175 levels where it is hovering around at the moment. So is it a buy? It depends on your time frame really. Is Tesla a good company? It is fundamentally sound although it still has some issues to sort out especially in this macroenvironment. But few companies have the resources AND the guts to do what they do venturing into avenues that borders on uncharted territories. Well that is because there is only one Elon Musk. As eccentric as he may be, he does venture where no one does or even dare to. So there you are. Especially in a world primed to go AI crazy, Tesla will be very relevant moving forward being firmly entrenched in the new world.  Howe

Loving a good bargain!  It looks like the market sectors are taking turns to take blows from the possible effects of the FOMC efforts to rein in inflation by tightening money supply as well as of course inflation itself. The tech sector is not immune as discretionary spending is reduced thanks to elevated prices of essentials and necessities. Couple that with inventory correction and we can see tech companies one after another reducing estimates just a few months later. How long this pressure on earnings will last depends on multiple factors but what is more important is the opportunity that arises from it. I will not deny that the consumers are hit hardby inflation as are the enterprises. However, I believe there is a silver lining and there will be some companies that emerge stron

Clean Energy vs AI When you pit two up and coming important features of the new world economy, you know it is never going to be a straightforward answer. So that is the disclaimer there! Both have their own merits and place in the economy and to be clearer, both represents the up and coming. This is not comparing between businesses in the sunset industry. These are categories up there in the rising industries and as such rapidly growing ones. In these categories, companies that are innovative as well as nimble to adopt new technologies as well as corner market share and create a moat will rise as the new behemoths while the others nibble at their feet. Think of where Apple and Microsoft were decades ago. Look at them now. These ‘matured’ companies are trying hard to keep pace and avoid be

Mid Term elections day No matter how apolitical you might think the market is or should be, we cannot deny that market policies and government spending etc are ultimately decided by politicians. Hence, the direction they are taking in terms of steering the country and the implications will ripple onto and into the very fabrics of the society they are leading and that of course includes the economy as well. That is why the decisions they make impact livelihoods and hence the big responsibities they shoulder. The markets like stability. And a clear direction. Hence, it would be in the best interest of the market to see a clear and undivided leadership. And in terms of US politics, that means control of the house and senate by the same party that the president belongs to. The logic

FOMC party aftermath The markets $DJIA(.DJI)$ , $NASDAQ(.IXIC)$ and $S&P 500(.SPX)$ retreated on Wednesday.The FOMC did not surprise and instituted a 50 basis point hike as expected. The market retreated after the Fed's announcement. And as alluded in the previous article, the previous day's price action look very much like a bull trap.The bulls did not carry the gap and the necessary support was lacking. The bears were waiting and now it looks like they are taking over vontrol.  Technically, the B wave of Wave 2 looks to have complete after nicely touching the 4100 levels. The C wave is possib

Microsoft vs Apple Being the two main stalwarts of the stock market, the jostling between these two heavyweights will be a hallmark of the market. Always vying for market shares in a tech dependent economy, who goes ahead will now depend on who gets a firmer grip hold on the AI driven trend that is driving the economy forward.  It is a very interesting but healthy phenomenon indeed and in terms of scale and sheer presence, no one else comes close and this is reflected by the heavy weighting each carry in the main indexes.  Back to the topic if Microsoft will surpass Apple in market cap, being so closely aligned to each other, I believe there will come a time when Microsoft will eventually surpass Apple but much like two racers who are at it with each other, they will each take tu

Is this Apple going to drop? The term Apple has been around for a long time even before the Apple now as we know it. A fruit first and foremost to begin with. Long before the Apple company revolutionised the world, the Apple fruit contributed its own 'revolution' in the scientific world. It was what dropped and helped in the so called discovery of gravity.  Fast forward several centuries later and the Apple that everyone seem to think of before the fruit seems to be defying gravity and keeps ploughing higher. That is of course a good thing if you are a shareholder (and you bought when it is closer to 'Earth'!). However, this Apple has gone to greater heights and we have to wonder if this is where gravity does not work anymore or more realistically when is it before the stock runs

Oil in wave 1 of larger uptrend Oil is completing the first wave of its larger uptrend. It seems to be completing the final fifth wave of this first wave up and I am expecting this first wave to end just sub $100.  The second wave retreat once this first wave is done should see prices retreat to $80 or slightly under around $75 which will then prep them up for that wave 3 move up beyond $100. The third wave will probably hit the market year end to early next year which will probably coincide with a market swoon. As of now, market is still comfortable with oil prices and inflation but as these prices pick up and pressure the markets, they might realise that a recession might eventually hit with the Feds not able to go off the brakes. So that I believe is the macro picture. In the near

An Intelligent Play That Pays Off The world is getting smarter. Phones have evolved from fixed lines and really took a major step forward when they became mobile and affordable for the main masses. $Apple(AAPL)$changed the game and stepped up a gear when they dared to convert the phone into a mobile computer and the mobile phone transformed into a smartphone which can do almost everything from surfing the net to watching shows and even writing up assignments! And this life changing device gave rise to the rise of another phenomenon called social media which I have talked about in another article. We are at the cusp of another life changing phenomenon called 'artificial intelligence' and its brethrens. 5G te

Nasdaq testing recent lows or making higher low?The Nasdaq chart seems to be looking to find a footing amongst the headlines. How it behaves in the coming days might be important to see if it is going to rally upwards to indicate a bottom or if it is to break lower.My take is this. The EMA100 on the weekly chart might be an important support and if it successfully tests and move upwards, it bodes well with a higher low at an important support and we might see more upwards movements. If it breaks lower, the recent lows will be in play and if successfully tested and supported, it will give a double bottom pattern which might indicate a reversal and give hope to the bulls. 😊

Bears 3980 vs Bulls 4120 The markets $DJIA(.DJI)$ , $NASDAQ(.IXIC)$ and $S&P 500(.SPX)$ started off on the back foot but ended almost level with the previous doji's closing. Very tricky market indeed. In fact, the bears and bulls are battling out a very poised battle. Neither wants to let go of their positions. Technically, I believe the levels 3980 and 4120 are key. If the bulls manage to push the bears beyond their positions at 4120 which happens to be the bears' bastion of strength being a strong resistance level, that might see a number o

Bulls found wanting The writing was on the card. I have been expressing my reservations on the rally which just seem weird with the divergences and a technical picture which does not seem to tally. And the noise from some of the 'experts' were ridiculous (seriously are they trying to drive up the market so that their big organisations can quietly unload their positions to the retailers? Just saying in jest and not to be taken seriously of course). When I refer to experts I am talking about mainstream experts who appear on financial news and websites from big organisations. Not all of them of course but some of them with some of the things they say just don't make sense. But who am I to say this. They are the experts! I mean some were talking about a new b

Short bounce before the dip to 3700-3800 levels The markets $DJIA(.DJI)$ , $NASDAQ(.IXIC)$ and $S&P 500(.SPX)$ fell in tandem on Friday. It looks like a bottoming process of the third wave of the C. A fourth wave bounce should follow which I expect to be shallow before another dip down.  More data are out this week although not as market moving as the data we had the past week. Early week sees housing data with GDP estimate mid week and the later part of the week has some consumer data.  The market is treading the road map that I la

Looking up The broad market held well above 4417 yesterday which I was watching to see if the bulls had control. So it seems they do at the moment holding the previous day's high levels quite convincingly. So where do we go from here? The pivot level at 4367 still holds key in my opinion. That level must hold or further weakness becomes a higher possibility. If the level at 4367 holds on a dip which I believe may occur as a three wave pattern down (micro chart), then that will set the pattern up nicely for a nice rally beyond 4500. If market rallies off these levels nicely beyond 4500, the rally to 4800 becomes a high possibility. I am watching a possible three wave B pattern up from the recent lows as an alternative. Hence 4500 is another key level which if fails will bring about a C wave

Light at the end of the tunnel To be honest, my answer is both a yes and a no! Yes they can rest easy because the rally isa long time coming and if a rally does not come, then the market is really not functioning as it should and that is an even more worrying concern! However they should not rest too much on their laurels because I believe a recession is impending and the indicator I followed which is the 3mths/10Yr yield has just inverted last week albeit for a short while. And that indicator has a strong track record!  So if the statistics bore correct, a recession will be around the corner within the year which at least gives us a time frame to work with. Nothing is confirmed but a road map is better than nothing! So considering the market bottoms around 6-9mths before a recession,

Waiting for FOMC's move  The markets $DJIA(.DJI)$ , $NASDAQ(.IXIC)$ and $S&P 500(.SPX)$ moved down on Friday. PPI data did not do much to help the bulls. So after movingup initially pre market, once the PPI data came out, the market swooned. Not surprising again, this market is so dependent on market inflation data and wanting the FOMC to pivot. Anydata that the market thinks may help turn the FOMC into doves will spur them on. And that may continue for a while more. This week sees two important events. Tuesday will see the consumer price index re

Good value play - IntelI would recommend $Intel(INTC)$. It has P/E around 10 only with a very big cap and has a well established moat in terms of its name and capabilities. Of course, there are other names like AMD and NVidia but valuations are not as attractive. Intel is like the Coca Cola of semiconductors. Been around for so long, still revelant and a behemoth but did not innovate quickly enough in a disruptive environment and hence was left behind. But now with a new CEO who knows whats happening and what needs to be done to correct the ship as well as taking the necessary steps, it might be an appropriate time to acquire Intel at its price now. It also fits nicely into Berkshire's investing theme and a stake in it will pro

Coming towards the end of November The markets $DJIA(.DJI)$ , $NASDAQ(.IXIC)$ and $S&P 500(.SPX)$ did not really move much on Friday amidst low volumes. Many were in holiday mood and were not too bothered with what was happening in the markets. So there was not really much to be talked about. And nothing muchhas changed to my road map to really go into details again.  This week will see the end of November and the markets entering the holiday season and year end. Are we going to see a year end rally? Its hard to say but the markets look more likel