As I mentioned on my Twitter feed, some folks are going to get a little confused (and misled) by the NQ since there’s all this chatter about Netflix’s plunge and yet the NQ is bright green (at least as of this writing). What they’re missing is that, in the few minutes between the close of the regular session and the close of the GLOBEX, the NQ went plunge-a-roony. When the new “day” began, everything is zeroed out, of course, and so the gain they see on the NQ is merely a fractional recapture of the loss it had earlier (tinted below in yellow).
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Let’s take a look this weekend at some of the major ETFs and what they might be suggesting for the weeks ahead. I’m doing these in alphabetical order.
We begin with the triple-bullish-on-real-estate fund DRN, which has been on a tear for months. (Its less volatile brother, IYR, has been acting the same). This is kind of a fascinating chart, because it is precisely at the apex of its symmetric triangle. Of course, that doesn’t mean it tumbles into oblivion on Monday’s opening bell, but I would at least like you to note this “juncture”:
With every single asset moving higher today, I wanted to point out that the laggards overseas have an opportunity to catch up as well. Although their topping patterns are well-formed, there is ample upside until such time as those overhead supplies are met. Such as emerging markets:
Now that Q2 is over, we can reflect upon one market that showed relatively persistent weakness: emerging markets.
One of the few broad charts that has been in a clear, defiant, screw-the-bulls downtrend has been emerging markets. Every attempt to artificially prop it higher has been smacked across the skull with a sledgehammer, and even yesterday’s ill-fated attempt to fake out the public has yielded nothing more than an island reversal pattern. If only everything else could look like this. Seeing the NASDAQ wiped out over the next five years would sure put a smile on my sour face, plus it would lighten up traffic where I live.
In spite of lifetime highs in most areas, the financials continue to look vulnerable. I mean, not everyone can be Netflix and Amazon, right? Anyway, the Analog From Hell is still utterly intact on the XLF:
Just about the only “honest” market left is bonds, which are reflecting the true underlying state of the world economy. The emerging bonds market, which peaked on January 5th, has been following a gorgeous pathway lower.