Momentum Monday…Bouncing Where They Should

Good morning everyone.

Today is the last Momentum Monday of the year. Ivanhoff and I look back and ahead at some of the surprises and and what we got wrong and right.

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You can watch/listen right here on YouTube and I have embedded it below:

Here are Ivanhoff’s quick thoughts…

The small-cap Russell 2k (IWM) tested its multi-month range lows last Monday and it bounced again. The large-cap, QQQ, and SPY also recovered from vulnerable positions below their 50-day moving averages. The participation in the rally was widespread – from reopening stocks like airlines, casinos, hotels, cruise lines, and beaten-down sectors like biotech and ARKK to momentum leaders like semiconductors.

The range-bound market environment remains intact. You don’t want to get too bearish when the main indexes are down several days in a row in a range market as was the case last Monday. You also don’t want to get overly bullish when the indexes are up several days in a row in the same environment.

The last and the first week of the year typically feature big short-term moves in beaten-down former momentum names. I will be watching for opportunities in those. We already saw stocks like BROS and MARA perking up on Friday.


Here is Charlie’s 7 chart Sunday

Have a great week.

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