Stock Market Weekly Roundup
The stock markets turned bearish the first week of 2022. The Dow Jones is the only one that is still trending bullish per my model. But not sure how long it can hold on. The NASDAQ and Russell 2000 look the weakest and bringing the other markets down.
The S&P 500 is sitting just on the 50-day moving average. Not that it necessarily means we are in for a much larger drawdown. In the last year the S&P 500 has breached the 50-day moving average 6 times and, in most of those occasions, bounced back quite rapidly after that.
I consider the S&P 500 to be neutral since the 10-day moving average is still above the 20-day moving average. That is actually bullish per my model. However, since the price is below both the 10-day and the 20-day I call it neutral.
Note that the NASDAQ and the Russell 2000 are definitely trending bearish. So, it could be a matter of time that the S&P 500 follows through to become weak. But I do not predict and play the markets as I see it.
It is the beginning of the year and so, everyone on TV is making their predictions. The range of their opinions seems to be between a +11% gain to a -7% loss for the S&P 500 for 2022. Again, I do not predict, nor do I follow anyone’s prediction.
The interesting thing is, and probably one that is the most important as well, the company earnings are expected to grow healthy again this year. And one thing I know is that, ultimately, it is earnings that drives markets.