With Q1 2023 behind us, I offer below a dozen charts (almost all of them ETFs) presented in as monthly bars. This very crude granularity allows one to see in very simple terms what the long-term personality of each financial instrument is at present. I’ve put my remarks for each item in the caption area of every chart.
My view continues to be that commodities will lead the way lower Q4 2022 was the start of this breakdown, and we made more progress in Q1. Energy continues to be my most dominant short sector.The worldwide stocks had a huge recovery in Q4 2022 and augmented that to a somewhat lesser degree in Q1. We have come full circle (well, full semi-circle) by retracing our way back to the base of the topping pattern.Japan has also executed a powerful retracement, managing to mash its way back to the underside of the broken long-term trendline.China was a relatively flaccid recovery. It managed at one point in Q1 to push back to resistance, but unlike most markets, it closed well below it.The only non ETF in this post is Bitcoin, and it deserves special attention. This was an enormous gainer – about 70% – and is sporting the first big green candle it has had in a couple of years. As you can see even with this monthly view, it did a pitch-perfect retracement back to its Fibonacci level.High yield bonds illustrate nicely how frail the market truly is. It would take very little to send this market crumbling again.The small caps were dramatically weaker than the likes of tech stocks, mainly because of so much weakness in the banking sector. The IWM has been tightly range-bound for the past four months.Speaking of banks, here you can see the March 2023 wipeout, which is the biggest since a year prior.The most jaw-dropping rise in equities was from tech stocks, and the QQQ here sports the biggest green bar it has seen since about a year ago. The low for the quarter perfectly touched both the channel trendline as well as the Fibonacci retracement. The end of Q1 was so strong that it actually pushed prices a little above a major Fibonacci level, sealing the gap of August 19th 2022.The ever-important S&P 500 fund is at the cusp of a possible breakout above its descending trendline. It hasn’t happened yet, but it is so close that it could easily happen the moment the market opens on Monday.The crude oil fund has broken beneath its ascending channel and is ready to break below its right triangle pattern.The oil and gas sector bears a strike resemblance, naturally, to DBC. This sector has plainly broken its uptrend, and even with the powerful rally in March 2023 for equities, XOP actually managed to produce a red bar for the month, plainly revealing its weakness.
