Welcome back!
We discussed in last week’s post about the market needing a breather/pause after the strong reaction to the election… and that is exactly what we saw. The market was also pricing in news that interest rates might not be coming down as quickly as originally expected.
That combination led to the markets dropping overall on the week.
It isn’t unusual to see some profit taking and a “pull back” after strong swings higher. What becomes important is sizing up the volume and the magnitude of the swing lower. We look to see if trend lines or major moving averages are failing. These factors can help us determine if the bullish trend is just taking a break or if it is starting to break down.
Looking into this week, we have earnings on tap from NVDA (Wednesday after the close) that will most likely send shockwaves through the market, especially the AI world.
We also have earnings from WMT, TGT, TJX and other retailers that could hint towards the state of consumer spending.
These factors could determine if the bullish trend resumes this week or if we see things drop further. All to say we are holding our Treasure Hunting score at the same level to ride through this week.
Happy trading!
