Daily Market News - 29th Dec 2021

Is The Market On A Rocket Ship?

It’s good to be back to work after a great Christmas period off.

Hopefully you’ve all had a good time too and enjoyed the massive market rally we’ve seen over the last week.

In case you missed it, I highlighted the likely market rebound levels on the 21st Dec - FOUND HERE and it looks to be playing out well.

Today I want to walk through some key charts and some sectors I think make a lot of sense to focus on, so lets start with an update to the the broader market.

S&P500 Index - SPX

Despite what some folks (**cough cough… perma bears) might have you believe, new all time highs are NOT a characteristic of a bear market, or indeed an imminent bear market. and when we take a closer look at the chart and the seasonal tendencies, it tells us we’re usually pretty good in January,

That said, I like to be aware of the levels where a bullish thesis starts to unravel, and after the small cap collapse last month (chart below) is my template.

The humble failed break out is usually where big declines start, so it’s logical to be aware of this.

What Sectors Look Interesting?

I’m not looking to reinvent any wheels here and I like to focus on strength most of the time. It’s just easier and helps me sleep at night.

So 1st up, we have semiconductors

Semiconductor ETF - SMH

You might have noticed semis stopped going up a month ago and are generally consolidating after a pull back.

In my world, if semis are going to push higher, SMH breaking out would make things much easier. As an investor in NVDA and AMD, I’m watching this chart closely.

Biotech ETF - XBI

There’s also a case to be made for looking at some of the biotech’s just now also. They stopped going down a couple of weeks ago, and there are a couple of signs they’re bottoming out.

If you missed my bottom call on Payment Processing names a few weeks ago which is playing out well - FOUND HERE. it’s a similar take on the chart with Biotech’s, but for me, XBI needs to get above $122, because Fibonacci levels matter in my world.

If charts are your thing, I put a heap out 10 days ago (video embedded below) and if you enjoyed the read, feel free to subscribe to our free content, or check out our premium work by clicking the button at the bottom of the page.