On the heels of TEN “up” days in a row, the equity markets are at the moment drifting aimlessly. The /ES has gone absolutely nowhere all night, and before the opening bell, the /ES, /NQ, /RTY, and /YM are a mixed bag of a little up or a little down.
The longer-term view of the /ES has a couple of relevant horizontals. The white one is the level of the last major peak took place, and the red line illustrates the lifetime high level, which as you can see isn’t far away at all.
And, of course, volatility has utterly collapsed, as the narrative has shifted from World War III over to Happy Days Are Here Again.
Keep the big picture in mind, though, everyone. Over the past half year, the NASDAQ has painted out a sweeping series of lower lows and lower highs. Yes, the move this month has been jaw-dropping, but again………context!
The semiconductor index, which has been hitting LIFETIME highs on a daily basis, is coming up against the underbelly of its broken uptrend.
I would also add that gold seems to be at a crucial level of resistance. Indeed, many assets are at “make or break” levels, although in recent days the bulls seem to have very little challenge in breaking above just about any technical barrier. Regardless, I shorted GDX yesterday.
I continue to be cash-heavy in this bewildering environment. The Taco Tuesday of a week ago has severely altered the character of this market, and I am as uncomfortable getting aggressive in this environment as I would be driving 70 miles per hour on a freeway enveloped with a thick fog.
It simply isn’t prudent.
