RSI At Extreme

Please click here for a chart of  S&P 500 ETF () which represents the benchmark stock market index & 500 ().

Note the following:

  • RSI is a measure of momentum. It is an oscillator that fluctuates between zero and 100.
  • The chart shows that RSI has taken another leg up reaching 96.69.
  • The chart shows that the last time this level was reached was in July.
  • The chart shows that RSI is now higher than three prior peaks since July.
  • The foregoing means that the probability has increased for the stock market to go higher between now and the year-end on a technical basis.
  • Big tech earnings are ahead this week.  reports after the close today.  and  report tomorrow after the close.  and  report Thursday after the close.
  • Even though RSI has set the stage for the market to move higher, this week it will come down to the big tech earnings.  Keep in mind that if earnings are less than the whisper numbers, such a high RSI makes the market vulnerable to a sharp drop.

Tesla

  is ording 100,000 cars from .  The order is worth $4.2 billion.  This is generating excitement in the stock market.

Trump Meme Stocks

Last week’s announcement of Trump SPAC () has got the meme crowd excited. They are buying  hand over fist.  Two related stocks PHUN and BENE have become the newly minted meme stocks.

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Momo Crowd And Smart Money In Stocks

The momo crowd is 🔒 (To see the locked content, please take a 30 day free trial)  stocks in the early trade.  Smart money is🔒.

Gold

The momo crowd is 🔒 gold in the early trade.  Smart money is 🔒.

For longer-term, please see gold and silver ratings.

Oil

The momo crowd is 🔒 oil in the early trade.   Smart money is 🔒.

For longer-term, please see oil ratings.

Markets

Our very, very short-term early stock market indicator is 🔒.  This indicator, with a great track record, is popular among long term investors to stay in tune with the market and among short term traders to independently undertake quick trades.

Interest rates are ticking up and bonds are ticking down.

The dollar is stronger.

Trading futures is not recommended for most investors. The purpose of providing this information is to give an indication of the premarket activity that usually guides the activity when the market opens.

Gold futures are at $1804, silver futures are at $24.54, and oil futures are at $84.89.

S&P 500 futures resistance levels are 4600  and 4900: support levels are 4460, 4400, and 4318.

 futures are up 42 points.

Protection Bands and What To Do Now?

It is important for investors to look ahead and not in the rearview mirror.

Consider continuing to hold existing positions. Based on individual risk preference, consider holding 🔒 in cash or treasury bills or short-term bond funds or allocated to short-term tactical trades, and short to medium-term hedges of 🔒, and short term hedges of 🔒. This is a good way to protect yourself and participate in the upside at the same time.

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You can determine your protection bands by adding cash to hedges.  The high band of the protection is appropriate for those who are older or conservative. The low band of the protection is appropriate for those who are younger or aggressive.  If you do not hedge, the total cash level should be more than stated above but significantly less than cash plus hedges.

It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.  When adjusting hedge levels, consider adjusting partial stop quantities for stock positions (non ETF); consider using wider stops on remaining quantities and also allowing more room for high beta stocks.  High beta stocks are the ones that move more than the market.