Don't Get Carried Away

Igor Manukhov - Dec 15, 2023

The markets are roaring, however a pause is overdue. Don't get too carried away with excitement. Use weakness to buy.

A surprise change of tone by the FED really got market participants excited. While I am very optimistic about the market in 2024, I would advise to proceed with caution. The market needs to pause and take a breather.
This recent rally has created a momentum divergence (orange lines). Notice how the market price surpassed July high while momentum indicators (RSI and MACD) failed to do the same. This setup tends to be a pretty good early warning sign that the market might have gotten ahead of itself.

Back in late October, the same setup but on the opposite side suggested that we are due for a rebound. The same setup gave us a warning sign back in late 2021 as well (blue lines). So when I see it, I tend to respect it and take notice.

I do not expect that this momentum divergence will result in a major selloff, however I would not recommend to chase the market at this time. Let the excitement cool down a bit. This should create a better buying opportunity.

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Don't Get Carried Away

Igor Manukhov - Dec 15, 2023

The markets are roaring, however a pause is overdue. Don't get too carried away with excitement. Use weakness to buy.

Igor Manukhov

Peter Kuntyj

Yelena Manukhova

Brittany Stone

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