It feels like we haven’t had two back-to-back down days in the market for ages, but we might just get one today. Let’s first take a look at overall momentum.
The /ES, shown below, blasted off like a SpaceX rocket after Liberation Day (first arrow), then its ascent began to mellow (second arrow) and, most recently, seems to have mellowed into a virtual flatline. The failure of the most recent trendline is also an important tell that things are weakening in equity-land.
More striking is what’s going on with the /NQ, which unlike its brother above has only managed to achieve a lower high (instead of a lifetime high) and has been rangebound for months.
Of aid to this is AMD, which reported after the close yesterday. As you know, AMD is one of my short positions, and I’m generally short semiconductors.
My largest short is semiconductor-related, the SMH ETF. Yesterday, SMH sold off hard but didn’t break its lower from overnight trading late Sunday. I’m certainly hoping today we snap below this level.
In a similar fashion, the broader /NQ tried to break Sunday’s low but couldn’t quite do it. I think today might just be the day.
Finally, keep an eye on the domicile of neck-bearded chicken-boner incels all around the world, Bitcoin. Its failure at $75,000 is an important psychological break, and an acceleration of the selling will help equity bears as it dawns on people how stupidly overvalued everything on the planet is.
