Happy 4th of July, Slopers!
As I sit here in the wee hours of the morning on the Independence Day of our once-proud republic, I thought I’d share a few charts with you before I pivot 15 degrees to the left and start work on another computer where I’d like to make some new SocialTrade videos.
Although it’s a market holiday, there’s still thin trading in some commodities as well as the Euro, which is down about 0.35% as I’m typing this. When (not if) it erases all of its retarded 20th-Summit-Rally from last Friday, you can bet I’ll be talking about it.
Anyway, I’ve got videos to make, so let’s get this charts done…….
The NASDAQ Composite, shown below, is within spitting distance of its descending trendline, offering resistance. For the bulls, they need to cut through this line, but it’s going to take some pretty hearty momentum to do so, because the Euro-thrill from Friday is wearing awfully thin. The bears want to see another failure of that horizontal line and, most importantly, a break of the ascending red trendline beneath it. This index chart, as most charts are right now, is pretty much a mess.
The ES chart below doesn’t show the modest drop that’s taking place as I’m typing this post, but the horizontal line is still relevant. If we get enough strength to push past it, the descending support line at provides a target of about 1385.
My old pal the EUR/USD remains my favorite chart, as it reliably keeps creeping down. I strongly believe that the mentally-deluded rally we saw last Friday will be yet another in a string of completely pointless and short-lived pops in this market which, as I’ve said thousands of times, is heading to ~1.14 before a true reversal is in. I’ve been right on this for many months, and I think this will continue to be the case.
The Tim Knight Miners Analog continues to look beautiful in the face of Kooky screams of Tim-Tard accusations.
I would also quietly point out that the NZD/USD break of its trendline is a powerful “tell” in the weakness underneath the surface of the artificially-propped-up asset markets of Earth.
What I’m also seeing in a lot of charts is a much weaker version of the kind of rally we saw in the recent past. Take note of the two parallel red lines on the right side of the chart below. Notice the strength and length of the prior pattern and rally. Now look at its most recent, much punier, cousin that we’re going through presently. There’s not much gas left in this engine.
As I said earlier, charts are still somewhat of a mess, as otherwise well-formed patterns are getting trouced by their opposites. We had a bullish pattern form between August 2011 and February 2012. It petered out in about six weeks, and we then formed a smaller bearish pattern, which started breaking now nicely in May 2012. And then we spent the entirety of June making an even smaller bullish pattern, whose uplift I’ve been groaning through the past few trading days. It is my belief that this, too, will lose its tiny erection, sending us drifting downward in a Q2-earnings-disappointment daze.
I’ll close with the S&P cash index, which has the same damned descending resistance line that everything else does; simply stated, if we cross it, the bulls will have control of the market more firmly in hand, whereas if we limply move away – – particularly if we break the low of the right shoulder at 1310 – – disappointment will grip the black hearts of the bulls once more, and the virtuous bears will, for however brief a reign, begin the melt anew.
So go have some ribs, hot dogs, corn, and beer. And, if you’re a bear, please be careful with those fireworks. Otherwise – – go ahead and have some fun with those matches! You only live once!