Let’s take a look at the major indexes as we approach a crucial new trading week.
The NASDAQ Composite has finished a major top and has retraced perfectly to resistance. It really must fall away from here in order to retain the clarity of this reversal. If it starts pushing into the pattern, that isn’t good.
The Dow 30 has a little more room it could go and not violate its top. This may sound like a truism, but truly, the sooner the market can resume weakening, the better, because the entirely of last week was all about recovery.
The NASDAQ 100 has another dynamite top that I would appreciate the market gods not violating.
The S&P 100 cash index – – same deal – – sorry to be so repetitive, but honestly, the market is POISED to fall hard, and it sure had better!!
I’ve got good news and bad news on the Russell 2000. The good news is that it is sporting an absolutely fantastic, picture-perfect head and shoulders top. The bad news is that it isn’t quite complete, although it’s getting there. Fingers crossed, right?
I continue to be obsessed with the semiconductor index and my trade on that consists of puts against the SOXL, which is the leveraged long ETF. As for the index itself, it has a beautiful diamond pattern which, just like every other freakin’ thing, was challenged to a strong counter-trend push last week.
I’ve been writing about the S&P and its Fibonacci relationships lately. You can see those drawn here, and we’re basically hanging out at the 23.6% level right now. A strong downward push could get us to about 6100 or so on the cash index.
Of course, the one outlier in everything going down so much has been oil itself, and the companies that suck the stuff out of the ground have been doing just grand, thanks so much.
Weirdly – – because, honestly, this makes ZERO sense – – the Transportation index seems not to care, even though one would figure they’d be getting mauled by this expense increase. Are they so savvy hedging with futures that it hasn’t mattered?
Lastly, gold has undone about half of its damage over the past couple of weeks, but I’d say the recovery looks to be over. That price peak on Thursday should be viewed as an important reversal level.
One last look at the S&P, but closer this time, illustrates the reversal top more plainly. Generally speaking, yes, we can tolerate a little more upside if necessary, surely driven by some silly pledge or promise related to the war, but generally speaking, we reallllllllllly need to start falling soon, folks.
