Momentum Monday. Take $747 Profit on ANET as Stocks Try to Put in a Bottom While Bitcoin Soars.

Plus - two new momentum trades

Image courtesy of flickr.com

The stock market is pausing its decline after the last two weeks of selling. I am recommending selling shares in networking firm Arista Networks with a ten day gain of $747/100 shares (6.95%).

• SELL Arista Networks (ANET). Bought 12/6/24: $107.50. 12/16/24 intraday price: $114.97. Return for this trade: $747/100 shares (6.95%).

Market Update – Bitcoin is the King of the Jungle. Don’t Count Stocks Out.

Bitcoin is the undisputed money magnet currently. The cryptocurrency continues to move higher with $100,000 quietly becoming support. This means that we can expect buying on dips as prices fall to that level. As I pointed out this weekend, money continues to flow in while the stock market has been sitting out the bullish month of December. The ADI line is moving steadily higher as short sellers are now panicking. This could well add more upside BTC in the short term. The OBV line is steady as long term HOLDRS are holding their positions.

But don’t count stocks out. The Fed is still likely to cut rates by 25 basis points in a couple of days, even as inflation is rising. The quiet rationale for such a cut is simple. The Fed doesn’t want to be blamed for a market crash this close to Christmas.

The New York Stock Exchange Advance Decline line (NYAD) broke below its 50-day moving average last week but is holding at the bottom of its trading range extending back to August when the current consolidation began. Moreover, the RSI for NYAD is just above 30. Similar readings since August have led to bounces in the market.

Meanwhile the U.S. Ten Year Note yield (TNX) has, for now, stopped its recent climb with the 4.5% area still acting as a ceiling. We’ll see what the bond market does after the Fed’s meeting, announcement, and press conference.

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