For all the false starts, fake outs and general sense of deception that has defined the market action of the past 12 months, this current rally is exhibiting all the characteristics an ardent, or even skeptical bull would prefer to observe at the onset of a substantial move forward.
Take for instance how this rally started: In the depths of absolute misery. In the midst of a banking crisis that was being compared to 2008. In the middle of no man's land from a technical and fundamental standpoint. An inconspicuous starting point, at a very minimum.
Take for instance what has led this rally forward: Crypto and growth names. The quintessential speculative leadership groups that are still under severe scrutiny, with crypto being assaulted by legislative initiatives, and growth under a fog of doubt with respect to valuation and earnings momentum moving forward.
Take for instance the cover this rally is taking to make its move: Q1 earnings function as what can basically be interpreted as the "cover of night" for the markets to get away from investors. Q1 earnings represent a prohibitive emotional and mental obstacle for investors who deem this earnings season too risky, especially in growth with the perceived atrocious valuation and earnings momentum equation. Markets like to make their moves under the cover of night. Earnings won't be the negative event most suspect, with a likely acceleration a la July/August of last year taking place in late April-early May.
Take for instance HOW this market is moving up: Contracting daily ranges, as volatility is suppressed, while both the Nasdaq and S&P coil around major support/resistance. We haven't seen this type of coiling paired with volatility contraction during any rally since the bull market peak. This rally is different.
The next major point of interpretation for price analysis is S&P 4300. From there we can assess what is next for the markets.
We have 150 points of free and clear upside until then.
Enjoy.
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