A look at the broader market and a few stocks – October 30, 2023
This is Dan Fitzpatrick with FITZ AND FIVE. Everybody is all lathered up that the Dow ( .DJI ) is up over 500 points, that’s about 1.6 percent, that’s a big move.
I would just say this, this is going to be a quick video because it is important but it doesn’t take long. Look at what is happening here with the 50 and the 200-day moving average. Both of them are trending lower, but this is what is going to happen on Friday; we are going to see this bearish crossover.
It really doesn’t matter that much what the Dow ( .DJI ) does over the next several days for the rest of this week. Mathematics is going to win the day and this will, ultimately, be a bearish crossover, which people get really concerned about. In fact, by the end of the week, I think it is something like 83 percent of all companies in the S&P 500 ( INDEXSP: .INX ) are going to have reported earnings.
That means that earnings catalysts are no longer going to be impactful of the market. They will move particular stocks around like ( NASDAQ: ON ) which was kind of a doozie. This one ( NASDAQ: WDC ), I am even seeing this after hours, this is because of a convertible bond offering. But you are going to get big moves in individual stocks.
Tesla ( NASDAQ: TSLA ) is another one, this is a key breakdown. A lot of the other megs have been doing pretty well. Meta ( NASDAQ: META ) is holding in there. Microsoft ( NASDAQ: MSFT ) is doing okay. This is kind of the best of the bunch, technically, but you don’t want to do anything right now, you just need to wait for a bit.
Alphabet ( NASDAQ: GOOGL ), no thanks, not on my watch. NVIDIA ( NASDAQ: NVDA ), we are still waiting for earnings in a few weeks. Amazon ( NASDAQ: AMZN ) is right up at the 50, again, nothing really to do there right now.
When I say, nothing to do right now, the point that is really important that you get; I am talking about the actionable right now. And most of the time, think about it, there are not that many great times to buy a stock. There are a lot of great times to hold a stock. That is in between when you buy it right and when it is time to take profits. Or if it is going against you, you take your loss.
The point is, there are not that many great times to buy a stock. So most of the time you are going to hear me say, “I wouldn’t really do anything right now.”And so that is what I am saying in this market right now. If we look at the Dow ( .DJI ), again, a very impressive move but it is not going to be very long before this thing gets up to this level, about 2.5 percent.
It’s not like we are going to get this big monster move. My caution is, to avoid being too eager because the market rebounded in a big way on one day. As oversold as it has been, this is something that you should be expecting. This percentage of stocks above their 40-day moving average is well below 20.00. I think we came into today down 15.00.
And then today, at one point, it is about the same on the low, 14.70. So this is at an extremely low number, and every time we would get a move this low, look at what happens to the S&P ( INDEXSP: .INX ). Ultimately, it is moving higher. And so it doesn’t surprise me that we are getting a little rebound here. I just wouldn’t read too much into it. Definitely, in my view, it is too late to be selling.
If you are holding a losing position, I think at some point you have got to just say, all right, I am going to try to sell it into some strength. And if you can do that, then you are going to be better off. But this is the cardinal rule for me, when the market is not favorable, I start building a huge massive position. And it’s an awesome position and it is no risk at all, it’s called cash.
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