The issue is that high interest rates still puts a lid on equities prices that for now cannot break above the 200MA without reaching overvaluation territory. I believe that rates would have to fall below 3.4% in order to witness a strong price uptrend. However this is not the way things seems to be moving to with numerous layoffs and expected corporate earnings constantly falling week after week.
There are however small signs that money is slowly moving back in: the Cumulative Tick displays an uptrend and the NHNL indicator has been above zero for the past two trading days. This tells us that small caps might be attractive here. Maybe a sign that interest rates will not move higher fast.
Another sign that rates might not be moving higher is that money started to move back into defensive sectors, while the NQ8 barely attracted money yesterday.
Conclusions:
Although we are not in an uptrend which could take time to materialize, there are some buying opportunities on mid/small caps.
Below are two long ideas.
