It’s been extraordinary rough sailing for the rapidly diminishing equity bears on the planet since April 7th. In retrospect, the entire Trade War Bear Market lasted two days and one minute. That is to say, it spanned Thursday, April 3, Friday, April 4, and for the first minute of Monday, April 7th. That was it. A grand total of thirteen hours and one minute of a bear market. Whoop-de-freakin’ do!
Having said that, let’s catch up with a handful of key markets. First up is the NASDAQ 100, which is getting within spitting distance of its lifetime high (set in February) but remains beneath its broken trendline. A push above this broken trendline would be simultaneous with a lifetime high and would probably end all bearish ambitions for months to come.
The small cap Russell 2000 had a strong day today, but it still remains in a bearish setup. It is very close to its counter-trend peak, but the top (pink zone) remains intact.
The semiconductor index is approaching Fibonacci resistance as well as a large zone of overhead supply. The aforementioned prospect for the $NDX (cutting above the broken trendline) would in all likelihood shove the Fib aside with little effort.
One market which is absolutely broken down and bearish is the Dow Transports. I again voice my regret that there is no good trading instrument for this, since the IYT ETF absolutely stinks. This chart is a wreck, and the price gap (to which the dashed line is anchored) is clear resistance short-term.
The Dow Utility Index is absolutely clinging to its own broken trendline. This would be an enticing trade, but the instrument to go about it, XLU, isn’t as compelling as the cash index (probably due to dividends).
As for volatility, it has collapsed by about 70% and may well crack below its trendline back into the mid-teens.
The precious metals gold mining index has been doing great, but its present price position relative to its pattern is looking quite lofty, and I’d say this rally is rather long in the tooth. Miners may have more upside, but even if they do, it isn’t going to be much, as long as this pattern remains respected.
Finally, although the oil producers index has been strong for weeks, the topping pattern here remains intact.
To be clear, recent strength has soured many of my bearish ambitions, particularly with respect to the broad themes of semiconductors and crude oil. I’m down but not out, as they say. My commitment level is at 102% spread across a relatively modest sixteen positions, but my stops are tight, and it’s going to take some real weakness to make me comfortable that the bears have the upper hand in this market again.
As it is now, the bulls seized the baton firmly on April 7th, and they haven’t managed to drop it since then.
