The market fell half a percentage point, so I suspect emergency committees are being formed in D.C. to introduce new programs for accommodation and stimulation. While we bask in the glory of this minuscule wipeout, let’s review a quintet of important ETFs.
First up is the global equity fund EFA, which continues to be held in contempt, beneath the broken trendline. We are within a consolidation range (green tint). So long as we can stay beneath the broken long-term trendline, there is a prospect of a sell-off more meaningful than half a percent.
Likewise, the broader IEFA fund is below its own long-term trendline. The “face-off” between bearish (red tint) and bullish (green tint) patterns is still fully intact and unresolved.
The Dow Transports are still trapped in their lower range, and even the recent for-no-particular-reason mega-rally didn’t even manage to break the medium-term descending trendline. I suspect that the after-hours dip in FDX won’t help.
What’s key at this point is whether the semiconductor index, which has been the absolutely lifeblood of this unhinged rally, flies into a lifetime high or not. Its biggest component, NVDA, simply marks new lifetime highs every day, but it seems some of the components (like AMD and INTC) didn’t get the memo.
One especially bright spot for me today was energy, since crude continues to tick lower. We need to take out that lower horizontal to really get things cooking.
I closed the day with a dozen bearish positions, every single one of them expiring in January 2024, and about 12% cash.
