We've had plenty of bullish signals over the past year, starting with positive accumulation signals as far back as June 2022, when I called a market bottom.
Sentiment was a HUGE problem to start 2022, but throughout the year, we saw exactly what we wanted to see from our 2022 MarketVision event, held back on January 7, 2022. The extreme complacency was eradicated due to the cyclical bear market that finally ended on October 13, 2022. While I had already turned bullish based on "beneath the surface" factors, ultimately we would need visual technical evidence to confirm those beliefs. On the QQQ, that technical evidence was provided last week:
Enter QQQ:
A downtrend is a series of lower highs and lower lows. On the chart above, I've numbered those key lower highs and lower lows 1 through 5. Until last week, technicians could argue that lower high (#4) and lower low (#5) were the critical resistance and support levels, respectively. Last week, however, this series was finally broken as bullish price action was sustained long enough to clear the high established in August 2022. Now we see an uptrend in place with a scorching-hot PPO. Money has rotated heavily from the SPY to the QQQ, indicative of a "risk on" market environment, one necessary to carry prices higher. From a long-term perspective, the rising 20-week EMA is our MAJOR support level. Unless that is lost, I'll remain firmly in the bullish camp.
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Happy Trading!Tom BowleyChief Market StrategistEarningsBeats.comBetter Timing. Better Trades. |