Thursday and, surprisingly, Friday were “healing” days for my trading psyche. Perhaps H2 2023 will be better than H1 (God knows it couldn’t be worse). I wanted to say a few words about the six indexes below.
The All World Index is still in the grips of its “face-off” between the pink and green patterns. It’s clear that the explosive move out of the green bullish base has sputtered. That’s all well and good, but what really needs to happen for the bears is for price action to erode into the price range defined by that green tint. This would negate the bullish base.
This exact kind of negation took place with the financials, thanks to the wipeout of several of the largest banks in the country. Of course, if those Communist swine named Powell and Yellen hadn’t interfered by way of the Billionaire Bankers’ Bailout in mid-March, the entire market would have followed suit. Instead, the $100 Billion that Yellen handed to her so-called friends gave a new lease on life to the financial sector. What needs to happen here is for prices to exit down, and to the right, of that green tint, thus negating this pattern once and fall for.
The Dow Industrials is also exhibiting this kind of “nice try, but no cigar” effort on the part of our bullish friends. They Dow still has a just at a good, strong breakout, but it’s going to take some doing to get above that green tint. Otherwise, you’re going to hear more sputtering sounds, particularly as we’re heading into the earnings season where, ya know, actual reality has its way of poking its head up.
The small caps have been range-range for time immemorial. We’re still rather near the top of this range, so there’s opportunity for weakness in the weeks ahead.
Of course, semiconductors have been the bulwark of the rally in 2023, driven by the unhinged fantasies about A.I. The semiconductor index successfully completed its bullish pattern and successfully padded those gains. Keep a close eye on the consolidation that’s been happening over the past month. If we start slipping under this range, watch out below.
Lastly, the Broker/Dealer index is one of the cleanest and most interesting patterns out there. We had a superbly clean top prior to the breakdown in 2022. Since then, we ascended into a very clean series of higher lows and higher highs, but notice what happened what the supporting trendline broke. As of our, this index has been working on what could potentially be an even more powerful topping pattern that the one preceding the 2022 rout. It’s about 80% done at this point.
