It wasn't long ago that the thought of the S&P 500 at 5000 was a mere fantasy for investors.
Bogged down by two straight years of everything from recessionary fears to avoiding the grey haired grim reaper (nickname Powell), investors came to see each and every rally as a selling opportunity, clinging to the 2022-2023 playbook they had become all too comfortable with.
It was at the beginning of December that it became apparent the markets had a different set of ideas, making it clear to those who understood the significance of the price action at the time that this rally was indeed different.
The resistance points of the past were no longer valid.
More importantly, the playbook of 2022 and 2023 was now a liability instead of an asset.
The market was about to embark on a shock mission that it has now completed.
With impressive earnings after the close from META and AMZN, along with the final resistance of the SPX about to fall, while the key NDX 18000 level acts as a magnet above, the awe stage of the rally is set to begin.
While the shock stage was a two month affair, the awe stage will be much more short lived.
While the shock stage had multiple twists and turns along the way, the awe stage will be vertical.
Expect the SPX 5000 level and the NDX 18000 level to be key points in this journey.
Those who have not capitulated to the long side to date will be forced to do so during the days ahead.
Their capitulation is your signal to raise cash.
While the simplicity of buy and hold was the most efficient form of operation over the past few months, this will more than likely change during February and March.
The opportunity to outperform will come in buying high percentage patterns that take place after the volatility subsides.
The rest of Q1 will be a game of cat and mouse.
Make sure you are on the right side of the hunt.
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