Nasdaq Trending Higher

The Nasdaq-100 formed an evening star candlestick pattern Monday after making a new minor high on last week's Thursday. The evening star pattern should have bearish implications for the next few days. The previous minor low is now at $2,750.


Bonds & Crude Intraday
Bonds formed an intraday triple top and confirmed the triple top with a breakout to the downside. The minimum implied measured move is $150. Further, bonds made a lower low today, continuing the down trend.

Crude oil was declining, lower lows and lower highs, and is trading near $100. Crude was in the process of forming a bottom. Confirmation of the bottom occurred. The crude oil bottom was an inverse head & shoulders pattern. The minimum implied measured move is $102.

Trendlines & Moving Average
As of writing, the market is still in an intermediate up-trend: The Nasdaq-100 is trading above the rising 50-day simple moving average.

Momentum
The 12-day rate of change indicator is declining and above equilibrium: That suggests the price is above where it was 12 days ago and the difference is shrinking. Further, the 12-day ROC is forming negative divergences. The 24-day rate of change indicator is flattening and above equilibrium. The 14-day RSI is suggesting the market is bullish. The 14-day slow stochastic indicator is declining after reaching overbought and recently formed a bullish crossover. The 14-day ADX is increasing which suggests the market is trending. The market is above the parabolic SAR: a sign the minor trend is towards higher prices.

Dow Jones industrial average & S&P 500
Both averages are confirming the bullish sentiment.

Energy versus Financials
The energy firms have begun to outperform, the ratio is above the rising 50-day simple moving average, the financial firms: Markets are beginning to price in inflation. Typically, energy outperforms towards the end of the cycle.

Energy versus Utilities
Currently, energy is outperforming the utilities: Markets are pricing in inflation. That said, overall the utilities are outperforming energy as deflationary risks linger.

Stop Loss Level
The protective stop loss level is $2,700: That level represents the worst case loss level and trades may be exited prior to the market reaching that level.

Conclusion: Bullish, caution warranted.

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Disclaimer: This article is not meant to establish or continue an investment advisory relationship. Before investing, readers should consult their financial advisor. Christopher Grosvenor does not know your financial situation and ability to bear risk and thus his opinions may not be suitable for all investors.