There were massive amounts of votes counted (146 million) as the stock market also showed some exuberance, with the NASDAQ 100 ($NDX) closing up 9%! The $NDX market rallied up to the highest close ever. The thrust was in every sector, and the market accelerated in a pattern similar to the election launch of 4 years ago.
As the Schnell Strength Indicator suggested, we were in the bottom quartile and to be on the lookout for rallies. I mentioned on the weekend review, that although the market closed lower on Friday compared to Thursday, the faster indicators were already moving up off the lowest levels. It was a great set up for a huge surge! While two of the three indicators are already moving higher this week, the third one will pick up quickly if we have any continued improvement.
The big rally was global this week. To me, this looks like an initiation thrust with more than 1000 stocks up 10% and more than 1000 stocks up 5%! That’s just huge. An initiation thrust is what you see to start a new rally. It requires sustained buying and big positions to push the market up this hard.
Indexes around the world and some of the ETF’s also soared to new highs. On the monthly conference call, I worked through a lot of the top industry groups and many were breaking above resistance this week. The combination of US charts like the Nasdaq 100, the emerging markets, Japan, copper, rare earth metals, the Yen, all breaking out this week, reinforce the concept of a new initiation thrust.
Summary: The election rally started Monday morning and continued all week. Friday was a sideways move but consolidating a massive move is not uncommon. Commodities are trying to break higher. The video covers all the charts, but the industrial and rare earth metals are moving up nicely. Based on the volume, the size of the move, the breadth of different sectors moving make it a pretty compelling place to be finding nice setups. Follow the daily setups by Dwight on the website for more ideas.
Let’s jump into the charts. Click below to view the full PDF.
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