We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Want to know what a market will do? Consulting a chart is the best way to see what will happen next, because charts are based on the simplest tenants of economics – supply and demand. Below are 5 must-see charts that suggest the market is closer to a bottom than you may think:
CNN Fear & Greed Index
The CNN Fear & Greed Index measures investor sentiment in the US equity market. Fear & Greed is derived through a composite of factors, including market trend, stock price strength, breadth (participation), put-to-call ratio, volatility, trading volume, and safe-haven demand. From its diverse bucket of metrics, CNN then creates a numerical score from 0 to 100, with 0 being extreme fear and 100 being extreme greed.
Spin: Fear & Greed is best used as a contrarian indicator. In the words of General George S. Patton, “If everyone is thinking alike, then somebody isn’t thinking.” The fact that CNN’s Fear & Greed Indicator is at an extreme greed level and is at the lowest level of 2023 should give bulls hope for a year-end rally.
Image Source: CNN
The US Dollar
An overly strong US dollar can adversely affect US equities. For example, an inflated dollar can hurt the competitiveness of American exporters (US goods & services become more expensive), weigh on US-based multinationals (overseas earnings get transferred back into dollars, reducing corporate profits), and finally can detract foreign investment into US equities themselves.
Spin: The US Dollar Index (DXY) and the Invesco USD Index Bullish Fund ETF ((UUP - Free Report) ) are up eleven straight weeks and are approaching resistance (supply). A pullback in the US Dollar would be supportive of equities.
Image Source: TradingView
Seasonality
In 2023, historic seasonal trends have perhaps been the best, most accurate roadmap for investors. The pre-presidential election roadmap is the optimal roadmap for investors to consult. Typically, equities rally into the late summer (like in 2023) and bottom in late October.
Spin: Because seasonality has been so accurate, investors have little reason to abandon it now. Look for a rally into year-end.
Image Source: Ryan Detrick, Carson Research
SPY Weekly Trendline
In equity trading, trendline support refers to a specific price level or line on a chart representing a historical trend where the instrument’s price tends to find buying interest and bounce upward. Typically, trendlines are drawn as a straight, diagonal line and should cover at least three significant touches. Longer time frames tend to have more meaning for traders.
Spin: Thus far this week, the S&P 500 Index ETF ((SPY - Free Report) ) found support at its weekly trendline nearly to the penny and reversed violently – a bullish sign.
Image Source: TradingView
Semis
Semiconductor stocks such as Nvidia ((NVDA - Free Report) ) and Advanced Micro Devices ((AMD - Free Report) ) are the lifeblood of the current bull market. Why? A major part of the bull case in equities is that the AI revolution will lead to higher earnings and allow high-tech stocks to grow into their seemingly lofty valuations.
Spin: The Direxion 3x PHLX Semiconductor Sector Index ((SOXL - Free Report) ) stood out Thursday, rising more than 7% for the session while finding support at its 200-day moving average. Buying interest in semiconductors is indicative of a “risk on” mood.
Image Source: TradingView
Bottom Line
After lulling investors to sleep in the past few months, several charts suggest that equities may wake up in a big way into year-end.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
The Equity Bull Case (5 Must-See Charts!)
Want to know what a market will do? Consulting a chart is the best way to see what will happen next, because charts are based on the simplest tenants of economics – supply and demand. Below are 5 must-see charts that suggest the market is closer to a bottom than you may think:
CNN Fear & Greed Index
The CNN Fear & Greed Index measures investor sentiment in the US equity market. Fear & Greed is derived through a composite of factors, including market trend, stock price strength, breadth (participation), put-to-call ratio, volatility, trading volume, and safe-haven demand. From its diverse bucket of metrics, CNN then creates a numerical score from 0 to 100, with 0 being extreme fear and 100 being extreme greed.
Spin: Fear & Greed is best used as a contrarian indicator. In the words of General George S. Patton, “If everyone is thinking alike, then somebody isn’t thinking.” The fact that CNN’s Fear & Greed Indicator is at an extreme greed level and is at the lowest level of 2023 should give bulls hope for a year-end rally.
Image Source: CNN
The US Dollar
An overly strong US dollar can adversely affect US equities. For example, an inflated dollar can hurt the competitiveness of American exporters (US goods & services become more expensive), weigh on US-based multinationals (overseas earnings get transferred back into dollars, reducing corporate profits), and finally can detract foreign investment into US equities themselves.
Spin: The US Dollar Index (DXY) and the Invesco USD Index Bullish Fund ETF ((UUP - Free Report) ) are up eleven straight weeks and are approaching resistance (supply). A pullback in the US Dollar would be supportive of equities.
Image Source: TradingView
Seasonality
In 2023, historic seasonal trends have perhaps been the best, most accurate roadmap for investors. The pre-presidential election roadmap is the optimal roadmap for investors to consult. Typically, equities rally into the late summer (like in 2023) and bottom in late October.
Spin: Because seasonality has been so accurate, investors have little reason to abandon it now. Look for a rally into year-end.
Image Source: Ryan Detrick, Carson Research
SPY Weekly Trendline
In equity trading, trendline support refers to a specific price level or line on a chart representing a historical trend where the instrument’s price tends to find buying interest and bounce upward. Typically, trendlines are drawn as a straight, diagonal line and should cover at least three significant touches. Longer time frames tend to have more meaning for traders.
Spin: Thus far this week, the S&P 500 Index ETF ((SPY - Free Report) ) found support at its weekly trendline nearly to the penny and reversed violently – a bullish sign.
Image Source: TradingView
Semis
Semiconductor stocks such as Nvidia ((NVDA - Free Report) ) and Advanced Micro Devices ((AMD - Free Report) ) are the lifeblood of the current bull market. Why? A major part of the bull case in equities is that the AI revolution will lead to higher earnings and allow high-tech stocks to grow into their seemingly lofty valuations.
Spin: The Direxion 3x PHLX Semiconductor Sector Index ((SOXL - Free Report) ) stood out Thursday, rising more than 7% for the session while finding support at its 200-day moving average. Buying interest in semiconductors is indicative of a “risk on” mood.
Image Source: TradingView
Bottom Line
After lulling investors to sleep in the past few months, several charts suggest that equities may wake up in a big way into year-end.