Santa Runs Out of Gas

After a rally that felt like it could go on forever, it looks like we are in for some turbulence.

Last week, I pointed out that nearly 50% of stocks on the S&P 500 were below their 200-day moving average. A signal of possible danger, despite the S&P 500 nudging up against its all-time high.

Something didn’t add up.

Fast forward a week, and we have seen some serious profit-taking emerge in the hottest areas of the market.

Even Nvidia dropped over 10% on the week!

Australia hasn’t avoided the bloodletting, with microcaps blasted over 5% on the week. The S&P/ASX Emerging Companies Index [ASX:XEC] is down 13% in three weeks.

The wider market is also looking a bit wobbly, with weekly bearish divergence confirmed last week in the S&P/ASX 200 [ASX:XJO].

I explain what bearish divergence is in the video below.

Charlie and I also discuss a few of the key US stocks that are copping a beating, including Palantir Technologies [NASDAQ:PLTR]. Michael Burry of ‘The Big Short’ fame, announced this week that he had initiated a huge short position in the stock.

But it’s not all doom and gloom.

There is always something running, and this week it is gas in the US.

Most of the rally can be traced to seasonal effects as they head towards Winter. But the Henry Hub Natural Gas Futures [NYMEX:NG1!] chart is primed to surprise to the upside.

Could the market be responding to expected jumps in demand over the next few years as AI data centres scramble for more energy?

Dive into today’s Closing Bell video below to find out our thoughts on the coming bull market in gas and how low we think markets will go on this correction.