The NASDAQ and S&P 500 both posted nice gains today, with both markets closing at session highs. Both indexes are closing in on the high numbers I mentioned; they will have a hard time closing above NASDAQ 17,500 and S&P 5,450. The volume was approximately average on both exchanges. Everyone is waiting on the CPI number tomorrow. I think it will tame, a tame number on the open sends stocks higher again tomorrow, but what is important will be the close. I have already heard and read that major institutions are trimming positions. Don’t be surprised if you see selling into the strength tomorrow of a tame CPI report. And don’t expect either market to close at its session high again. This correction is not over. The short players will rear their heads once institutions start trimming positions into strength. It’s going to happen! I am just not sure when. This week has quite a bit of economic data that should be market-friendly. But one piece of data that is taken as negative sends this market down hard. Don’t be greedy! Pigs get fat and hogs get slaughtered. Do you want to be the biggest pig in the pen and fight (make money) another day or do you want the slaughtered hog? If the market rallies hard on the open, it will close the day much weaker than it began, as I believe you will see selling into the strength throughout the day. (Remember, I said that.)
REMEMBER: The market psychology has switched. I wrote about this in a previous post. The market was taking bad news (such as a weak job report, etc.) as good news. When that changed, the volatility began, and profit-taking and shorting started. The market is currently taking bad news as bad news (with that thought in mind). The jobless claims number is Thursday, and consumer sentiment Friday could have bad news. Don’t be afraid to take a few chips off the table.
The Small Cap Russell 2000
It was a very good day for the Russell 2000, gaining 1.68%. But this index currently will suffer the same setbacks as the NASDAQ and S&P 500 when selling resumes. Market conditions have changed, and they are not conducive for the small-cap market to sustain the rally that began 5 weeks ago. I believe the small cap will perform well but volatility will remain in small caps until the correction is over in NASDAQ and S&P. I expect this index to outperform the others and do well around November and into 2025.
Upstart
Upstart did well today, up over 10% (I told you it was volatile) Volume was again heavy on the buy side. This likely means the short sellers are continuing to be squeezed (I told you the shorts were wrong on this). Anyway, it looked to me like they were covering today in anticipation of a tame CPI. A tame CPI sends this stock higher at the open tomorrow. But if selling begins late in the afternoon (2:30 pm), I would expect. Upstart is volatile to the downside.