From Manic To Panic

This is the closing report for January 18th, 2024

Market Summary:

Yesterday my closing market report was called "Global RISK OFF". One day later a face ripping rally. As I posted on Twitter this morning "bounce is due any day now. But after that markets will likely explode".

We can presume the bounce has begun, so now the the $trillion question - how long will it last? More on the topic of oversold bounces below:

Market Stats:

What stands out below is that the leading sector, Tech/Nasdaq had negative breadth today.

Closing Breadth

Advances-Declines (Source: Stockcharts.com)

NYSE: +500

Nasdaq: -100

Highs/Lows (Source: Stockcharts.com)

NYSE 105/48

Nasdaq 45/151

Leading/Lagging Sector(s):

Today, mixed bag on sectors. Tech led of course, but bond proxies lagged. Everything else was flat to up.

Within Tech it was all about semiconductors as I opined this morning. However, even the majority of semiconductor stocks are no longer participating in this rally. Here we see the equal weight semiconductor index is three wave corrective similar to July:

Here we see Apple also three wave corrective:

Other Markets:

Commodities/Oil: Up, led by oil

Gold: Up

Bitcoin: Down

Recall it was just last week that the SEC approved spot Bitcoin ETFs and in that short amount of time has already surpassed silver as the second largest commodity ETF:

FR: This is a lesson learned for bullish investors: Despite the fact that billions of dollars have flowed into Bitcoin ETFs making it the second largest commodity asset class in just one week, it's still collapsing. Today, Bitcoin definitively broke down through the 50 day moving average. Which does not bode well for social mood and speculative risk appetite.

Finally, getting back to the $trillion topic of oversold bounces, I would suggest that compared to March 2020 this market is not very oversold. Back then, the market became oversold, bounced, and then exploded lower remaining fully oversold for the remainder of the collapse.