Let’s take a look at seven key indexes before the week closes, shall we?
The NASDAQ Composite continues its multi-month grind to nowhere. Until it breaks out of this range, the grinding will continue. The longer it goes, the more dramatic the breakout or breakdown will be.
The Dow Industrials has broken its uptrend ever so slightly, and remaining below the psychologically important 50,000 level will help water down any enthusiasm for buying.
The NASDAQ 100 is in the same situation as the broader Composite: a multi-month range-bound grind to nowhere. There can be no meaningful success for the bears unless and until we break below that pink zone.
At the risk of being repetitive, we have the same situation with the S&P 100. I will note that there is a much clearer pattern being formed with this one, with a series of lower highs being established in recent weeks.
The Russell 2000 small caps is still within the confines of its ten-month uptrend. Here, again, there’s a medium-sized amount of work for the bears to do before any hearty selling has a chance. Conversely, a push above the horizontal (where the island gap was established) would give the bulls the all-clear.
The semiconductor index was pushed down by NVDA, but there wasn’t nearly enough of a drop to constitute a trend break. I can assure you I will keep a close eye on all of these trendlines.
As for the gold sector, it is continuing to rock the free world. One has to wonder how much longer these green slips of paper in our wallets will be useful anymore.
I have continued to keep risk exposure relatively modest, with one portfolio at a whisper-thin 49% commitment level. There have been too many disappointments lately (SGHC, AXON, and most recently, DELL) for me to get aggressive. I will say that the charts above offer the prospect of a much more meaningful breakdown, but a pattern in formation is not the same as a completed pattern.
