Markets took another jump on Tuesday, ending with a milestone close above Nasdaq 6000. The stage of optimism is set as trader’s eagerly await DT’s big tax plan announcement. Markets certainly do like the tax cuts, but there are so many questions… Will they eventually pay for themselves by economic growth down the line? Do deficits matter? What time will he announce (or tweet) the plan?
While folks are busy trying find the answers, a “sell the news” shakeout event may indeed be brewing, as IO (our Issues Oscillator) took a jump right up into overbought territory (bulls should beware of the crescent moon). Meanwhile, TVO (Our Total Volume Oscillator) is rising quickly after 2 straight days of across-the-board accumulation, so long-term bulls can rest a little easier for the time being. In the short-term, though, how or if we pullback (HG says SIDEWAYS/DOWN for Wednesday) remains to be seen, but bears should keep in mind that while all gaps ultimately get filled, some don’t have to fill for a long, long time. -MD
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