Round Number Rodeo:
Long-time readers of mine know my affinity with round number theory and some of the major benchmarks are colliding with them. The S&P 500 is sniffing the very round 6000 number after Wednesday’s break above a short double-bottom pattern just days after the bullish harami candle at the 50-day SMA on 11/1. Below is the daily chart of the Nasdaq and it is kissing the 19000 figure. This was a robust move today, with some organic buying and some short covering, a lethal combo, but things do not go up in a straight line. In my humble opinion, the best thing that can happen now is to absorb these gains and try to set up some bull flag continuation upward patterns. We have a Fed meeting this week and overall, gap ups on indexes used to be a rare occurrence. They seem to be happening regularly now. I feel that bullish seasonality will play out into year-end and perhaps we see 20000 on the Nasdaq by the end of 2024. That would not be going out on a limb with a bold call as that is “only” 5% from today’s PRICES. The signature of a powerful bull market is one that shrugs off bearish candles. On the Nasdaq WEEKLY chart, we can see we are now negating the bearish evening star completed in mid-July and this week’s potential bullish engulfing candle follows last week’s bearish engulfing and the prior 2 before that both spinning tops. Expect further strength but perhaps let the indexes catch their breath first.