The past couple of weeks have created a thrilling change in the tone and structure of the entire equity market. I see it illustrated with:
- important lifetime tops at important levels of resistance;
- a shift from “higher highs” to “lower highs”;
- a clean succession of price gaps, which are vital for setting stop losses.
The NASDAQ Composite illustrates all three of these beautifuly.
Here is the longer view, showing the massive wedge which has completed and failed.
The tech-heavy NASDAQ 100 offers the same lessons, with individual instruments like ORCL suffering rapid and historic wipeouts.
Again, the longer view showing the bearish potential.
A favorite of mine has been the small caps, which blasted to their orgiastic climax on the heels of the “12 on a scale of 1 to 10 – HAW HAW!!” China announcement a few weekends back. Across the board, crucial resistance can be seen at Wednesday’s low/Thursday’s high.
We may well have shifted into a totally new market in which the Buy the Dippers are going to get wrecked time and time again, whereas Sell the Rippers are the new winners. Call me Jack!
Perhaps the most exciting technical event of the week was, at least, the failure of the semiconductor index. NVDA, AMD, MU, and the like have been the pillars of this entire bull market. The pillars are cracking, and if, pray to God, NVDA poops its pampers on Wednesday evening, it’s game over, man.
Witness also the S&P 500 which has formed, and broken, an absolutely beautiful wedge, which is now doing a yeoman’s job as powerful resistance.
Lastly, precious metals will not, be immune to the asset liquidation. Seeing the gold sector beaten back down to its upper trendline would serve as a good buying opportunity.
I have amped up the aggressive of my positioning, dialing it up and down a necessary from 110% to 200%. As of this moment, I’m at a fairly mild 110%, but I plan to go hog wild on Monday if we resume the weakness.
