Insider Tips - Weekly Stock Market Report - Week October 21, 2024
Weekly Insider Tips - October 21, 2024
Welcome to another Market Pulse for October 21, 2024! It's been another green week, with markets soaring due to the Fed's recent $500 billion money injection. The S&P 500, Dow Jones, and New York Stock Exchange hit all-time highs, though the NASDAQ hasn't caught up yet. Big tech stocks like Apple and Nvidia are close to breaking records, while stocks like Tesla and Amazon are showing bullish trends but remain cautious ahead of earnings. The market is doing well, and I encourage you to stay in the game and not miss out on these opportunities. Subscribe to the Insider Tips newsletter for even more insights!
Market Overview and Trends:
It’s been an exciting week in the markets as we’ve seen a sustained green run, particularly fueled by a recent massive influx of liquidity into the economy. The Fed has printed $500 billion in just three weeks, which has clearly given the markets a boost, driving three of the four major indexes (S&P 500, Dow Jones, and the New York Stock Exchange composite) to all-time highs. The NASDAQ hasn’t quite reached that level, still held back by some of the big tech stocks, but it's catching up and moving in the right direction.
The overall sentiment remains bullish, despite the negative headlines about elections or geopolitical worries. Markets tend to "climb a wall of worry," meaning they often do well even when there’s widespread pessimism. This week is a testament to that, with the S&P 500 hitting record highs. When you look at charts, the year-over-year growth is astounding – for example, the S&P has risen by about 33% since last November. If you’ve been on the sidelines waiting for a crash, you’ve likely missed out on significant gains.
Technical Analysis:
Volatility, as represented by the VIX, is trending downward. It's just above its 50-day moving average, but the market’s steady uptrend is a sign that the volatility is coming out of the market. For those selling covered calls, lower volatility reduces premiums, but for buyers of stocks, it’s generally a good thing as it signals stability. The trend remains strong across many indicators, and money is steadily flowing into the markets, driving new highs.
The New York Stock Exchange's breadth also reflects the bullish sentiment, with 162 new highs versus only 19 new lows. The consensus is clear – the markets are green, and the Fed’s injection of money is one of the main driving forces behind it.
Individual Stocks:
Several notable stocks were covered in this week’s analysis:
-
Apple (AAPL): Apple recently hit an all-time high of $237.23 but wasn’t able to sustain it. However, it looks poised for another run at that level. Warren Buffett has sold off a significant portion of his Apple holdings, which raises some questions, but the stock still has strong momentum and could break through if market conditions continue to be favorable.
-
Nvidia (NVDA): Nvidia has a 97 relative strength rating and is also near its all-time high. It touched $1407.6 but didn’t have enough volume to push past it. If more volume comes into the stock, it could break out, but for now, it remains a resistance level.
-
Tesla (TSLA): Tesla had its Robotaxi event, but it didn’t impress the market as much as anticipated. The stock is hovering below its 50-day moving average, which is a concern since bad things often happen below that level. With earnings next week, investors should have a strategy in place as Tesla navigates this critical period.
-
Amazon (AMZN): Amazon is forming a pennant pattern, which typically indicates a breakout in one direction. Its relative strength is 69, showing solid but not overwhelming momentum. If it can push past its current resistance at around $195, we could see a significant move higher.
-
Alphabet (GOOGL) and Microsoft (MSFT): Both stocks are underperforming relative to the broader market. Alphabet has a relative strength of 41 and is sitting near both its 50-day and 200-day moving averages, lacking strong drivers for growth. Microsoft is in a similar boat, with a relative strength of 44, and money has rotated out of these stocks into other sectors.
-
Meta (META): Meta continues to outperform, hitting new all-time highs, thanks to its AI initiatives and continued strength in revenue from Facebook and Instagram. However, volume isn’t backing this move, which could mean the stock is vulnerable to a pullback if market conditions change.
Key Takeaways:
- The market is on a historic run, with multiple indexes hitting all-time highs.
- Money is pouring into the markets, largely driven by the Fed's liquidity injections.
- Volatility is trending down, which is generally favorable for stock buyers.
- Big tech stocks like Apple and Nvidia are close to breaking out but need more volume to push higher.
- Stay cautious with stocks like Tesla and Amazon as they approach critical earnings and resistance levels.
- Meta is performing well, but low volume could make it vulnerable to a reversal.
Conclusion
The markets are riding high, buoyed by an unprecedented amount of new money flowing into the system. Most of the major indexes are at all-time highs, and even though tech is lagging slightly, the overall outlook remains strong. It’s important to stay engaged and not miss out on these opportunities, especially as volatility recedes and the market remains green. Stocks like Apple, Nvidia, and Meta are showing strong potential, while others like Tesla and Amazon may require more careful strategy ahead of key earnings reports. Keep an eye on volume and technical indicators, and as always, have a solid plan in place to navigate these exciting but sometimes unpredictable markets.
In short, the market is green, the opportunities are vast, and now is a good time to stay invested but cautious as we move forward.
Current Market Condition:
The market is experiencing a strong, extended green run, with the S&P 500, Dow Jones, and New York Stock Exchange composite all hitting all-time highs. This bullish momentum is largely driven by a recent $500 billion injection of liquidity from the Federal Reserve, which has fueled significant market growth. Despite negative news in the media, the markets continue to climb a "wall of worry," with investors taking advantage of the opportunities. Overall, the market remains green and thriving, reflecting strong investor confidence and the influx of new money, which is driving stocks higher across the board.
Stock Tip of the Week:
3 Ways to Create Income With Covered Calls on NVidia - See how a breakout stock like NVidia can still be a conservative play with In the Money Covered Calls and LEAPS -3 Ways to Create Income With Covered Calls on NVidia (covered calls and LEAP Strategy) Check it out here!
Frequently Asked Questions:
Podcast this Week:
Today, we’re diving into the world of cryptocurrency, a topic that excites many and frightens just as many! Join us as we speak to Dr. Daniel, a unique voice in the crypto community. Not only is he a seasoned dentist, but he’s also a dedicated educator focused on breaking down the barriers of crypto investing. Dr. Daniel has developed a program to demystify crypto, offering straightforward, jargon-free insights that empower beginner investors to make informed decisions. Are you curious about how to navigate the crowded field of over 30,000 cryptocurrencies safely? Wondering how to harness the potential of the upcoming bull run? Dr. Daniel shares invaluable strategies to set you up for success! Watch the full episode here!
