Bubble Up

More and more, the period we are in reminds me of late 1999. I will have a 30-minute video out this afternoon showing the comparisons and other important relationships.

What I can say for sure is to buckle up. While the secular trend is intact and bullish, the short-term trend continues in a blow-off, bubble-like state. Accordingly, this market is not for the faint of heart though the dip a week ago now looks like a one-off event related to the GameStop/Reddit phenomenon. Volatility will remain high, and downside risks are elevated to code red.

We should gap higher again this morning to a new all-time high in the S&P 500 index. The Nasdaq 100 is even a bit stronger and is also set to open at a new record high. Overnight inventory is 100% net long and we are currently trading close to the middle of the overnight range.

As there is no upside reference for trade today other than the overnight high at 3900.50, my early focus will be on whether or not there is a gap fill. Then, if so and how much. 

Friday’s time-based point of control was relatively prominent at 3880.25 and could also be tested on any weakness. Beyond that, we have untested points of control starting to stack up with two just in the last three day sessions at 3855.25 and 3827. Any of those can be targets on any corrective activity.

A.F. Thornton