AZL Daily Report, page-85

Will we get to the bull market?
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Yes AZL gained 2 pips to finish at 7.5c. Our volume was decent though not very high, just over 11m shares traded. So are we all getting ready for next leg? Its knocking on the door. We had our best finish in couple of months. 4 times we have played around 7.6/7.8 - the upper mark of this trading range. I feel there may be 1 more test of that level before we overcome that. So feel should happen in next few days. I also feel we may breeze thru 8s and get to 9 quickly - lets see if that happens - but as I say, I won't be surprised. I am waiting for that to happen to add to my trading stocks.
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ASX Li stocks was only marginally in front. Of the 73 stocks that I track, average gain was around 0.5%.
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Overnight US U stocks also did not make any big gains. Though the ETF of LIT gained over 2%, other stocks were hesitant - average increase was just around 1%.
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What next:
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Yesterday SP 500 had a very good day. I had written yesterday it would be good to finish above 4100- and somehow we did that. It stayed above the number 4100 which I may have been harping for at least 2 months. SP 500 finished at 4119, though it reached 4148 intra day, it could not close on its high. ASX though was again timid, and did not gain that much, just over 0.1%.
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Those who care read my posts, one common theme for a rise/bounce/bull market I have been talking about nearly all the time - get above 3900 (done), get above 4000 (done), get above 4030 (done), get above 4100 (done), get above 4170 (pending). So its clear we have been doing very well. One last hurdle to cross before we enter bull market.
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The bear are in turmoil. Some die-hards have not given up but others have. Michael Burry, the Big Short, had said that disaster is looming in 2023. As I have been mentioning, there were 3 things which would have got the crash in last 1 week - PCE data, Earnings Report and Powell. We had good PCE data, decent Earning Reports, so Powell speak was final straw. And he blinked. And what did Michael Burry do - instead of deleting the twitter message where he called for the big crash, incidentally he has deleted his twitter account itself.
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So why did many analysts get it wrong? I did a lot of study after June crash. Most analysts follow charts and patterns. From a chart perspective, there is striking similarity between 2002 and 2008 crash - where we were few days back, it was exactly a replica - uncannily similar. Both in 2002 and 2008 the big crash happened from that point. But its not happening now, something I have been calling. Why? Although the charts are exactly similar, the underlying economic conditions are vastly different. In fact, economy was showing to be very healthy now. Both in 2002 and 2008 it had already deteriorated by then. As I mentioned in one of my earlier posts, even the recession indicator used in US by NBER - 6 metrics - none of them look bad and in recession - they look quite healthy. It could deteriorate later, but no crash signals now. Most chartists just looking at graph were probably overlooking the factor. Also in 2022 they were right so many times, so there was a bit of overconfidence. But its not over yet. We are still in bear market. We still have few hurdles to crash. So they could be right and big crash could come, but probability is not very high.
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Lead indicators are looking very good. Volatility Index fell below 18. Both Yields and Dollar Index fell. So looking good from larger indicators perspective.
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Personally as I have been saying, my most buys happened in last 2 weeks. I like to trade, so keep buying/selling specifics, but overall added a lot. As long as we stay above 4000 I will hold. 3900 on SP 500 is absolute bottom for me. But lets see it looks far away, but I will not be surprised if there is a retest of two number - 4070 and then 4020. As long as its back test and we return, its good - but if we can't hold, then some thinking is required.
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So what will happen tonight? US Futures mixed - not providing real direction. Asian markets largely green. Bitcoin eyeing 24k. Although we don't give credence to this correlation between cryptos and stock market, many times cryptos have taken the lead and stock market has followed. So they provide a good indicator - not always right, but many times. Lots of key earnings reports tonight. Some jobs data. There is a chance tonight of a back test of 4070 - probability wise this has the highest probability, so chance of some red. But the bulls are in rampage mode. We are in striking distance of getting out of the bear market if we cross 4170 - there is a chance to make the first attempt tonight.. Will that happen? Lets hope so. All the best.