I contend that we have been in a trading range between 15,500 and 16,000 on the NASDAQ since the start of November. Which way that gets resolved will determine the direction of the market in the immediate term IMO.
While bulls made progress Wednesday, pushing the NASDAQ up 70 points (0.44%) to 15,845, we are still well within that range and nothing was resolved. I don’t expect much movement on Friday so things will be pushed off until next week – allowing us all a much needed break to enjoy Thanksgiving!
Clearly, bulls won Wednesday with NYSE + NASDAQ Advancers to Decliners 4,508 to 3,323. However, new highs on the NASDAQ were only 65 while new lows were 275. In addition, NYSE + NASDAQ volume was 7.6 billion – down 22% from the 9.7 billion shares traded Tuesday. Lower volume equals lower conviction in my point of view though price is still price.
Among stocks, I thought the most interesting action was the contrast between the performance of agricultural equipment manufacturer Deere (DE) and software design company Autodesk (ADSK). DE reported a sterling quarter with revenue +16% and EPS +72% compared to a year ago. In addition, they guided FY22 net income to $6.5 billion to $7.0 billion compared to $5.963 billion in their just completed FY21. DE shares jumped 5.32% on strong volume.
ADSK, on the other hand, reported what looked to me like fine numbers Tuesday afternoon but shares were smashed Wednesday -15.49% on huge volume. As you can see in the chart above, ADSK sliced right through its 200 DMA and is now another broken tech stock.
I continue to believe that the theme going forward is long commodities (and precious metals) or what I colloquially called “stuff” in the above tweet and short tech – though tech will not go down without a fight.