As I mentioned in my previous post, it was surprisingly difficult to find bullish-looking patterns in the wonderful land of exchange traded funds. Bearish patterns were abundant, however. Below are a few.
Emerging markets has broken its ascending price channel and is sporting a very clean price gap.
The same can be said for the EFA, which has respected its own gap for months now.
China, which Goldman was gushing would be such a great investment prior to the Xi summit, has been a total dog. This market actually peaked decades ago and has been struggling like mad ever since.
Gold miners continue to be weak, as the precious metals mania has long since died.
Gold itself is also weak, with $4,000/oz. gold being the most logical target.
The semiconductors are at nosebleed levels, and the lackluster performance from NVDA following its earnings could foreshadow the next few weeks for competitors.
The S&P 500 isn’t bearish per se, but its inability to notch another high, coupled with a cute little shooting star on Friday, might portend a nice drop on Tuesday.
Bonds, my anchor position, rallied as I hope they would right up to the price gap. I amped up my TLT puts on Friday, and I’m glad to say my dumping of TBT late Tuesday was beautifully timed.
In turn, homebuilders recovered some this week, but if bonds resume their fall, I am certain homebuilders will follow them lower lockstep.
I continue to believe Bitcoin could get to $40,000 this year, and if so, this bearish top on the best-volume Bitcoin ETF will prove prescient.
The metals fund has a squeaky-clean price gap which would represent a sensible stop-loss for any short here.
Finally, the health care fund has rallied back to its own horizontal, which could make for a compelling new entry when the market re-opens on Tuesday.
