Stocks have climbed a mountain of worries this year, ranging from lingering inflation to bank collapses to the possibility that the U.S. Congress might just decide not to pay its bills. But has the run, also fueled by excitement over artificial intelligence, gone too far?
That’s the suggestion of Tom DeMark, who was recently celebrated by the technical analysis CMT Association and is the founder and CEO of DeMark Analytics. He focuses on the number of days — which don’t have to be consecutive — that there was a close lower than the low of two days ago. Subject to various conditions, when the countdown reaches 13, a buy signal is triggered. (The opposite is the case on the way up.)
In an email to MarketWatch, DeMark, who has advised investing legends including Paul Tudor Jones, Leon Cooperman and Steven A. Cohen, says the Nasdaq 100 QQQ,
He says a Nasdaq 100 ’13’ top will need both a higher high, as well as a higher close, than Tuesday’s levels.
“This will be the first time this year Nasdaq 100 time and price trend exhaustion components should be in sync with one another. Once they align, a subsequent close less than both the closes 4 and 5 days prior should confirm the nascent downtrend,” says DeMark.
He also identifies another change. He says the five-plus months of Nasdaq 100 outperformance over the S&P 500 is about to reverse. “Once two additional higher closes are recorded, sell countdown 13 will be recorded,” DeMark says.
Not that it’s necessarily good news for the S&P 500 SPX,
The VIX VIX,
The markets
U.S. stock futures ES00,
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The buzz
House Speaker Kevin McCarthy said a debt-ceiling deal could be reached as early as this week as President Joe Biden cut short an upcoming foreign trip. “[Tuesday’s] meeting between President Biden and House Speaker McCarthy went as well as could have reasonably been hoped for,” said economists at Citigroup.
Target TGT,
Western Alliance Bancorp WAL,
UBS UBS,
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Top tickers
Here were the most active stock-market tickers as of 6 a.m. Eastern.
| Ticker | Security name |
| TSLA, |
Tesla |
| GME, |
GameStop |
| AMC, |
AMC Entertainment |
| XELA, |
Exela Technologies |
| MULN, |
Mullen Automotive |
| AAPL, |
Apple |
| BUD, |
Anheuser-Busch InBev |
| AMZN, |
Amazon.com |
| NVDA, |
Nvidia |
| NIO, |
Nio |
The chart
There are a variety of indicators forecasting the U.S. to enter a recession — but this market implied gauge has reached 99%. The model uses the difference between the 3-month forward Treasury rate beginning 18-months ahead and the 3-month Treasury bill to estimate the probability of a recession in the United States 12 months ahead.
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