Edition #136 - Stock Market Update

My Thoughts on the Equity Market

Hey everyone,

I hope everyone had a wonderful holiday and is getting to enjoy time with family & loved ones! I’m sure the last thing on your mind is the stock market, but I still had some important things to recap and some perspectives to share as we enter the final trading week of 2021. As a reminder, I’ll be publishing my 2022 market outlook in the coming week where I’ll be giving my in-depth outlook and prediction for 2022, a brief recap of 2021, and sharing my top stock picks for the year. Make sure to keep an eye out for that email, it will be available for all subscribers!

As I’ve continued to say over the course of the last month, the last week was another tremendously exciting week for the stock market. In last week’s premium newsletter, I mentioned that the weekly candles over the past four weeks were showing extreme indecision, given by the wide range of movements & mixed directions. With another week under our belt, we can see that this continues to be the case:

This now marks the 5th consecutive week where we see large candles (representing substantial price changes over the weekly period) in mixed directions. In each week, we can see that the close is either at the top or bottom of the weekly range in either given direction. The key thing to note is that this type of indecision CAN actually be healthy! What this tells me is that the market is digesting substantial gains and getting acclimated to current market valuations at ATH’s. As I’ve been saying in real time, I remain bullish so long as we remain above the September 2021 highs (shown by the thin grey range above). So far, this former resistance level continues to act as support. If we zoom in we see the following: