Catapult Not Capitulate

The top 5 stocks on the Nasdaq 100 are literally catapulting forward like fireballs in a forest fire.

With this sort of sudden push, it seems like the investors that were starting to short the market based on declining breadth last week, but got squeezed and have been forced to cover. The $SPX has done a moonshot from 3400 to 3480 after breaking above the former highs at 3393. The Nasdaq 100 is climbing even faster.

Looking at some of Wednesday's leaders on weekly charts outlines the visual catapult analogy, as all of these charts are dislocating from being anywhere near last week's closing level.

Wednesday's Nasdaq 100 top performer is no stranger to big moves. The COVID dip is minor on the NFLX chart below. The PPO momentum indicator is still making higher highs and higher lows. With the solid price action this week, Netflix's next technical goal will be to try and take out the all-time highs.

Another big name has been Workday (WDAY), so it is no surprise to see that name near the top of the big movers today. The weekly chart below shows WDAY catapulting above the 2020 highs to new 52-week highs. The PPO momentum indicator is accelerating higher and the next target is the all-time highs.

The next big performer is Adobe (ADBE), having a wonderful week. This has been a double off the COVID lows. No trend lines required! The stock is going ballistic, the momentum indicator is soaring to super high levels and the parabolic euphoria can only be described as a catapult move up!

The next one is Facebook (FB). I was listening to a Social Media podcast and they were describing how Facebook is doing a wonderful job with Instagram. They talked about the different ways to post content, how viewership can expand using the built-in tools on the site and how progressive it is. The stock market apparently agrees! As you can see below, this chart is catapulting higher.

The final chart of the top 5 today is Tesla (TSLA), which has been doing catapult launches week after week. I would suggest that, at some point, earnings might have to join the chart shape, but currently everyone is smelling the tailpipe fumes of a Tesla and it is just clean air way up here.

But the other big names also launched as well. Small growers (sarcasm) named Amazin (actually Amazon, AMZN)...

...and Alphabet (GOOGL).

Today, chart after chart soared. It reminded me of the enthusiasm of June 8th, which marked an interim top. For investors, seeing spectacular ballistic charts covering the index is bullish. But if you were looking for a euphoria meter, the charts above are a pretty good example of rational buying becoming a little more delusional. May I suggest keep moving up the stops to try and lock in the big gains? Apparently Jay Powell's speech tomorrow morning is all about creating inflation, and these stocks are trying to get ahead of the game.

Good trading,

Greg Schnell, CMT, MFTA