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Markets are temporarily overbought. We are coming into November, which often leads into the better part of the year. Though this summer has not been bad at all, so how do you use seasonality?
Yes, there's some potential short-term risk with the Trump-Xi meeting at the end of the month. That could cause some volatility. Maybe it'll cause a pullback, or maybe it won't. He doesn't know.
He's spent 40 years staring at stock charts. He knows the signs of a bubble, and we're in one. But that doesn't mean that it pops tomorrow. His firm plays the trend, but in the back of their minds is a certain level of caution.
In a nutshell, he looks for breadth getting narrow -- and it did, as AI is all the focus. Volatility gets low -- on the S&P chart, previous wild swings have gotten very tight. He also looks at sentiment indicators -- "the crowd" is becoming too enthusiastic, though not at the levels when bubbles actually pop (though they're getting there).
As long as the Fed is pushing, we're going to keep going up (don't fight the Fed). But at some point, there's going to be a day of reckoning.
For more insight, investors can go to his blog at valuetrend.ca and search for relevant articles.
Will be affected if Trump doesn't do a deal with China, because that's where they get their stuff. That's as far as he's going to go on fundamentals; charts tell us everything we need to know.
Chart shows the uptrend, and then the arc off trendline is a parabolic move. He'd bet that there's a fair distance between the 200-day MA and the recent peak - when that's 20% or more, he calls a stock overbought. But longer-term trend is good.
He looks at peaks and troughs. What you may be seeing right now is a higher trough. Now the stock needs to take out the last peak, around $9. If it moves above $9, the technical point of view tells you that the sellers who didn't like the stock are being taken out.
Don't buy here but, funnily enough, he'd buy it higher.
S&P is at new highs, but not this name. Chart shows what could be a double top (you have 2 peaks where a push higher failed). Old point of resistance ~$180 becomes support, and that's the neckline. If it pulls back and bounces off, then it's probably a consolidation. But if it breaks, look out below.
He did a recent video on how the Mag 7's are starting to not perform as the breadth broadens out.
Hasn't bought yet, is on his buy list, but only for his aggressive strategy. One-year chart seems to show it's breaking out from the bottom and has done a reversal, but it's early. Not showing much life yet. But if it started making higher highs and higher lows, there's tons of upside. Downside level is probably ~$300.
(Note the short timeframe.) He's been legging in a bit at a time for the better part of a year. If you look at a 3-year chart, you can see the swing pattern for trading. You can buy it somewhere near $60, and sell it somewhere near $69-70.
Eventually, it'll break out. His team has a longer-term perspective on this name, so they haven't been selling at the peak. (Sees nat gas as bullish for next 3-5 years.) But they do buy 1-2% when it's troughing ~$60.
His firm has been on the uranium train before it was cool. This one went parabolic, needs to pause. Can't argue with a big breakout (the longer the base, the bigger the case). Would be healthy for stock to consolidate and then break out again.
Because of the move, no support points on the chart point he can point to. If it starts to move down, each investor has to determine their own "uncle" point.
