In late October, I laid out my "Case For A New Bull Market." Since then, there have been some bullish developments for the market. First, Federal Reserve Chairman Jerome Powell stated on Wednesday that, “The time for moderating the pace of rate increases may come as soon as the December meeting.” Any signs that the FED may be willing to pause rate hikes and that battle to tame inflation is succeeding will always be good news on Wall Street.
In addition, the Russell 2000 and S&P 500 are now both above their respective 200-day moving averages which is a wonderful sign. While the Nasdaq is still trading below its' 200-day line, it is has shown some nice accumulation as well as a lack of distribution over the last three sessions.
Most importantly, we are starting to see individual stocks wake up. ENPH, ALNY, VRNA, and REGN all displayed signs of institutional accumulation this week. CELH, MNST, FSLR, CPRX, and VRTX have all had wonderful weeks while DAWN is setting up well near the 50-day moving average.
All of this is a good sign for the overall health of the market. Remember, we want to see broad participation as the market rallies. An uptrending index held up by just a few mega-cap names like we saw in late 2021 indicates the market is skating on thin ice. Hopefully, we will continue to see individual stocks outperform in the coming weeks. That will be a wonderful way to end the year after a difficult trading environment throughout most of 2022.
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Full Disclosure: I currently own some of the stocks mentioned in this blog post.
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