[Market Outlook] Some Rays of Sunshine, Let Us Tell You Where

[Company Logo] Some Rays of Sunshine, Let Us Tell You Where The U.S. equities markets do not look pretty after this week’s steep decline. However, while there are dark clouds over the market, especially in high PE multiple growth stocks, the sun could peek out before too long. [image] The Clouds That Rained On Last Week’s Began to Form a While Back You might recall our Market Outlook from November 21, 2021, titled [“Something Stinks.”]() In it, we highlighted prescient market messages such as… “Most noteworthy is that both market internals and market sentiment eroded despite two US equity benchmarks hitting new all-time highs this week.” And Mish’s observation that... “This past week the market found both love and irreconcilable differences. The love came from the big cap tech stocks. Nvidia, Apple, Google, Microsoft all gave investors hearts and flowers. On the flip side, small caps, energy, industrial metals, and transportation stocks gave investors indigestion, inconveniently ahead of Thanksgiving.” These conditions often foreshadow seemingly harmless pullbacks that escalate into the ugly, rapid sell-off conditions we experienced last week. Not surprisingly, the real carnage was led by both the aforementioned small cap index (Russell 2000, IWM) and the big cap tech (NASDAQ 100, QQQ). In fact, 2022 has been the NASDAQ 100’s worst-performing January since 2008, and as you read below, the broader NASDAQ Composite index is on pace to have its worst January performance ever. The NASDAQ is down 12% from its highs for the first time since March 9th 2020, and… More significantly, it closed below the institutionally respected support level of the 200-day moving average shown in green in the chart of the QQQ below [image] What’s Next? As the table below shows, when drops greater than 5% happen in January, further downside has occurred in the short-term. However, three months later tends to yield a rebound. Of course, the sample size is small. In 2008, the index was down 9.89% and ended the year down over -38%, however, in 2009 the index started off down 6.38% and ended the year up 45%. Pick your poison. [image] In the chart below, you can see how every January performed for the last 50 years in the Nasdaq Composite with a semi-log scaled chart for perspective. [image] Despite the bearish beginning of the year, there are bullish conditions also. Click below for similar charts on the other major indexes, 7 areas of bullish conditions, BigView market highlights, and our weekly market outlook video analysis. [Click here for the Free Video and Market Highlights]() [Click here for the Premium Video and Market Highlights]( Best wishes for your trading, Keith Schneider CEO MarketGauge Get more - follow us here... Twitter [@marketgauge]() and [@marketminute]() and [Facebook]( To stop receiving this go [here.]() Got Questions?Office hours 9-5 ET (New York time) Email: info@marketgauge.com Live Chat: Go to bottom right corner of our [home page.](=) Call: 888-241-3060 or 973-729-0485 There is substantial risk of loss associated with trading any securities including and not limited to stocks, ETFs, futures, and options. Only risk capital should be used to trade. Trading securities is not suitable for everyone. No representation is being made that the use of this strategy or any system or trading methodology will generate profits. Past performance is not necessarily indicative of future results. To unsubscribe or customize your email settings, [click here](). "Market Intelligence at a Glance + Tools For Serious Traders" [Unsubscribe]( MarketGauge.com 70 Sparta Ave, Suite 203 Sparta, New Jersey 07871 United States (888) 241-3060