The Bottom Line:
- Buyers in control as S&P nears all-time high
- Tech stocks gaining momentum with notable earnings reports
- S&P breaking downtrend line signals bullish trend
- Nasdaq 100 lagging slightly but poised for growth
- Insightful discussion on risk-on and risk-off dynamics with Michael GED
Buyers in Control Near All-Time High
Market Sentiment and Technical Analysis
[Music] good evening and welcome to another weekend edition my name is Peter res from shadowtrader domnet buyers are in control that was the theme this week S&P pushing over a downtrend line and putting the all-time high within Striking Distance and the ndx on Friday Also crossing the same downtrend line most of the fangman plus T big Tech that we watch most closely have all reported some of that has added to the gains uh this week Tesla had a spade of bad news all week which has kept the stock under pressure and we're still waiting on Nvidia earnings which are going to hit on May 22nd all right all that being said all that matters is how this left the charts without further Ado let's see what's really going on moving over here to the S&P 500 on The Daily we can see strong Advance here over the course of the week but the biggest technical event which is most important is of course the break of the downtrend on Thursday which I believe is now putting that all-time high into play 5264 85 is the level that I feel the market wants to go to it's on that trajectory we're close enough now in Striking Distance I don't see why that couldn't happen potentially next week so keep an eye out for that obviously 8 EMA here we talk a lot in Prior shows about what I call the pinch when that 8 comes up through the 21 that's a longer term bullish signal as long as that eight is trading below the 21 you have more of a choppy Zone in the market and once you start printing that shorter term exponential moving average above the longer term obviously then you have more of a trend happening you can see the S&P is moving higher so barring any sort of crazy news or negative large event something systemic or whatever I think the S&P has a good good chance of pushing to that all-time high next week moving on to that Tech side NASDAQ 100 the other market so to speak it's the other Market that we pay most attention to in my own trading in my analysis I&##39;ve always said it's all about these two markets S&P 500 NASDAQ 100 same time frame daily chart the takeaway I want everybody to get from this chart as opposed to the S&P which we just saw is really the distance here from where we are up to that all-time high is greater and the and also the fact that you have a little bit of a lag technically and that the ndx only broke the downtrend just today here on Friday may10th and sort of made that dogee that balancing day that we had today strong again the only thing is this is a little bit Divergent it's acting as a little bit of a drag if you've been trading these markets actively all the time in the last say year or so it's been going on for a while right you've seen amazing amounts of push pull in this market where NASDAQ and Es seem to to be slightly disconnected from each other and we're seeing that here Tech has definitely been lagging a little bit but again if that S&P is on the same trajectory moving to that all-time high it is obviously going to pull the ndx along with it and there is a chance that the ndx actually does the same thing and moves up to that high as well same situation with the uh moving averages that I talked about in terms of the pinch there's the pinch right there the pinch happens on the Gap and since then you've just had this trajectory and again breakup Trend in the ndx so overall bullish the technicals in the S&P and in the NASDAQ 100 pushing into next week caveat to all of this as I was saying barring any sort of fundamental event only thing I want you to keep on Horizon is the fact that you've got a lot of economic data hitting the tape next week starting on Tuesday and pretty much all the way through so watch that closely because if anything could derail the market potentially it's going to be one of those numbers but regardless of that technical picture here is pretty intact moving averages stacked the way they should be and trajectory for some more gains next week
Insightful Discussion with Michael GED
and now let's look at the markets from a different perspective as you know I am strictly technical in my analysis and trading of the market but today I have a special guest for something called the fundamental take if you're on financial Twitter you definitely know this gentleman he is Michael GED from the lead lag report Mike I'm super excited to have you on the program I have been a fan of your work for some time uh if you could just just give us a very brief introduction on who you are and what you do yeah I appreciate that you know I've been a big fan of yours and you're one of the guys that I've respected for a long time and not just for your market analysis but just for you as a human being so thank you for being you uh in a world where there's a lot of people that are not uh uh good people I think in this industry um so no I appreciate it so I'm the publisher of the lead lag aort this kind of Premium research service I put out as well as portfolio manager of uh three funds I put out a podcast called lead lag live on all I'm on all major social media Platforms in particular Twitter SLX author of five different research papers that won different Awards and uh most would consider me pretty annoying uh when it comes to how I think about markets so Mike if I could sort of just condense uh a lot of your work down to in sort of like a a smaller sound bite you look at relationships between different markets such as like it could be Lumber to gold or uh S&P versus utilities or various durations of treasuries and that gives you an overall sort of bias on the market that's either risk on or risk off if I have it correct my first question to you is that do you think at all that given the things that have happened over perhaps the last say five to 10 years such as uh zero interest rate policy that went on for so much longer than we thought covid that disrupted you know supply chain and labor force participation and things like that is it possible that we are in some sort of a new normal where some of these correlations have broken down and some of the uh stuff that sort of you know has informed your work over all these years basically that it may not be working going forward all right so let's take a head back because there's a lot to unpack there which I think is is really interesting to kind of think through um the framework for me around risk on riskof is not about Direction when it comes to risk assets it's about volatility conditions changing so risk on means lower volatility riskof means higher volatility right it's really about the volatility framework more than anything else um generally it's true that when you're in a low volatility environment stocks tend to rise there's an underreaction there's momentum there's Persistence of trend generally it's true that in high volatility stocks tend to be in a down tread in a declining phase but the the real decision or the real way to think about risk on riskof is about volatility more so than anything else um now you asked an interesting question around are we in some new normal um yes and no and now the reason I say it that way is the indicators I'm known for util go the things you mentioned have actually largely been correct in identifying volatility Rising on a go forward basis risk off and I say that very purposely because you can be correct in your uh uh interpretation of conditions favoring more price Generations or or uh Less Price Generations but your opportunity set still needs to play ball with you as your way of expressing the trade okay so as a good example typically when you're in a high volatility period for equities and you have to be long only if if you're going to be long only and you're entering a high volatility period for equities you have four choices to choose among to be long only and potentially survive and benefit from that volatility you can either be long the utility sector most defensive sector of the stock market that by the way has done extraordinarly well the last eight weeks relative to the S&P you can be long the dollar meaning short the euro along the Dixie type index that's done it really well since we've gone through this cycle you can be along gold okay gold is a riskof trade meaning it benefits from volatility and equities that's done really well obviously you know since the start of April uh and typically you can beong treasuries as your expression of riskof because treasuries historically when you have heightened volatility uh tend to be a beneficiary that's the whole flight to safety now there is a strong link between volatility and credit spreads okay the why is that because when volatility Rises the bond market perceives uh junk debt as being risky
Tech Stocks Gaining Momentum with Earnings Reports
Tech Stocks on the Rise Following Strong Earnings Reports
Most of the tech stocks, including the fangman plus T big Tech companies, have reported positive earnings, contributing to the market gains. Tesla experienced some challenges throughout the week, keeping its stock under pressure. We are still waiting for Nvidia’s earnings report scheduled for May 22nd.
Positive Trajectory in Tech Sector Driving Market Momentum
Both the S&P 500 and the NASDAQ 100 have shown significant progress, breaking downtrend lines and moving closer to their all-time highs. While there may be some divergence and lag in the NASDAQ 100 compared to the S&P 500, the overall technical outlook remains bullish. The moving averages are aligned favorably, indicating potential gains in the coming week.
Market Outlook Amid Economic Data Releases
Looking ahead, it is essential to keep an eye on economic data releases scheduled for next week as they could impact the market. Despite potential external factors, the technical picture remains strong, with both the S&P 500 and the NASDAQ 100 poised for further gains in the near future.
S&P Breaks Downtrend Line, Signaling Bullish Trend
Tech Stocks Reporting Strong Earnings
Most of the tech stocks, including the fangman plus T big Tech companies, have reported positive earnings, contributing to the market gains. Tesla faced challenges throughout the week, impacting its stock performance. We are eagerly awaiting Nvidia’s upcoming earnings report scheduled for May 22nd.
Positive Momentum in the Tech Sector
Both the S&P 500 and the NASDAQ 100 have made significant progress by breaking downtrend lines and approaching their respective all-time highs. Despite some divergence and lag in the NASDAQ 100 compared to the S&P 500, the overall technical outlook remains bullish. The aligned moving averages suggest potential gains in the upcoming week.
Market Prospects Amid Economic Data Releases
As we look ahead, it is crucial to monitor the economic data releases planned for the following week as they could impact market conditions. Despite potential external influences, the technical analysis indicates a strong outlook for both the S&P 500 and the NASDAQ 100, signaling further potential gains in the near future.
Nasdaq 100 Poised for Growth Despite Lag
Tech Sector Showing Positive Momentum After Earnings Reports
Most tech companies, including major players like Tesla and Nvidia, have reported strong earnings, contributing to the overall gains in the market. Despite some challenges faced by Tesla, the tech sector is exhibiting positive momentum.
Positive Market Outlook Supported by Technical Analysis
Both the S&P 500 and the NASDAQ 100 have broken downtrend lines, indicating a bullish trend. While there might be a slight lag in the NASDAQ 100 compared to the S&P 500, the technical indicators suggest a favorable outlook for further gains in the near future.
Upcoming Economic Data Releases and Market Prospects
Next week’s economic data releases will play a crucial role in shaping market conditions. Despite potential external factors, the technical analysis points towards a strong market outlook for both the S&P 500 and the NASDAQ 100, setting the stage for potential continued gains.
Discussion on Risk-On and Risk-Off with Michael GED
Insightful Conversation with Michael GED on Volatility Framework
Discussing the concept of risk-on and risk-off, Michael GED emphasizes that it’s more about changes in volatility conditions rather than directional movements in assets. He underscores the importance of understanding how volatility affects market behavior and decision-making.
Market Trends and Asset Relationships in Turbulent Times
Exploring the impact of recent economic events like zero interest rate policies and disruptions due to COVID-19, Michael GED reflects on whether traditional correlations between assets may be shifting. He delves into how indicators like utility stocks, the dollar, gold, and treasuries can provide insights into market sentiment during periods of heightened volatility.
Adapting Investment Strategies in an Evolving Market Landscape
Considering the potential ‘new normal’ in market dynamics, Michael GED highlights the need for adaptive investment strategies. He discusses the challenges faced when traditional risk-off assets like treasuries deviate from expected behaviors and how investors can navigate such uncertainties to optimize their risk management and returns.
