13,000 Thursday – Nasdaq in Critical Territory

13,146.  

That's the 50-day moving average on the Nasdaq that we need to cross back over by tomorrow or it's likely the Nasdaq continues to correct back to the 200-day moving average at 11,721, which would be 10% down from where it is now.  Since we know the Nasdaq is ridiculously over-valued, the 10% down scenario is a lot more likely than the resume the rally scenario.

Sure we just got $1.9Tn to play with but we knew we were getting that since November, when the Nasdaq was at 11,000.  $1.9Tn is 10% of our GDP and 11,000 + 10% is 12,100, not 13,146, which is 10% too high.

Everything is Awesome again – just like it was in 2007 and do you know what else is just like 2007?  Refinancing!  That's right, American Homeowners cashed out $152.7Bn of home equity last year, up 42% from 2019 and the highest level of withdrawals since 2007, although 2005, 6 and 7 were actually $262Bn, $320Bn and $240Bn respectively – so we're not there yet.  Still, as we now know in retrospect – people using their home equity as a piggy bank does not tend to end well, does it?

We're still on a stimulus high, of course and the Dow is at an all-time high at 32,300 but it's more like 32,400 in the Futures along with S&P 3,925 and Russell 2,305 and we'll be betting against them into the weekend so don't miss tomorrow's Short-Term Portfolio Review.  Considering the all-time highs, the STP is holdiing up remarkably well (see yesterday's Live Trading Webinar for my notes) but that's because our key shorts were TSLA and QQQ, which worked out very well for us and we even cashed out our Tesla shorts this week – another reason we need to adjust the STP.  

 

IN PROGRESS