Gianni Di Poce sees the Nasdaq climbing to 32,000 or even 33,000. He calls that target conservative.
This morning’s cooler than expected inflation report pushed stocks to new highs. The fade that followed doesn’t change his view.
The data sharply cut the odds of a Fed rate hike at the October meeting. Gianni sees that shift driving the positive reaction.
The Nasdaq outperformed on the session. Money rotated out of semiconductors and back into software.
Gianni remains very bullish on software. Semiconductors make up 40% of the tech index. Software makes up only around 20%.
Microsoft hit new highs today. Palantir, Nvidia, and Google all showed strength too.
Gianni’s rule on price action is simple. A consolidation near the highs of a move is bullish.
The Nasdaq set a record high just a week ago. It’s now carving out a wedge pattern near that level.
A false breakout would have popped to a new high and dropped straight down. Gianni doesn’t see that happening here.
He isn’t ignoring the cracks in this tape. Here’s what he’s watching in tonight’s video:
- Micron reports earnings at the closing bell tonight. The market expects just over $31 in earnings per share from one of the 20 stocks holding this market up.
- Only 10 to 20 stocks are carrying the market higher. Dow futures took out yesterday’s lows. Dow cash still hasn’t broken last week’s lows.
- Gianni sees crude oil sliding toward $75 to $80 support. He calls a $10 to $15 drop in crude the final piece bulls need.
- Long bond futures sit down in the 102 handle and look very oversold. A squeeze that drops the 30 year yield near 4% with the Fed paused at 4% would flatten the curve and bring recession talk.
- The euro just hit new lows against the dollar. Gianni reads that as a big signal that money is coming back into the US.
Today marks the end of the month and the quarter. Gianni wants you to pull up the monthly charts on every position you hold.
His warning is direct. If a stock you own isn’t in an uptrend on a monthly timeframe, you may not want to own it.
