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If the long-term picture provides for precious metals to beat the stuffing out of equities, the patterns have been playing out beautifully. However, for an impatient person like me, I have to admit that there’s plenty of room left for stocks to rally (or metals to weaken) until we fully retrace the massive topping patterns that have already been put in place.
The old market saw goes that you should sell in May and go away, and rarely if ever in my view has that been more true than it is this year.
That isn’t to say that equity indices can’t go higher in the short term. I wrote a post on Tuesday looking at possible upside targets on SPX and QQQ that I would like to see hit, and have more modest upside targets on DIA and IWM that I’ll also look at today.
When we see the high for this move made, whether at those targets or lower, I think the prospects for equities over the summer look bleak. I covered some of the reasons for that in a post last Thursday on my The Bigger Picture substack looking at why the Iran War was largely irrelevant in the context of the economic shock being created by the closure of the Strait of Hormuz. If you haven’t already read that I’d suggest that you do that.
(more…)Here’s an item I shorted a couple of days ago to good effect: Pony AI, a company that’s never seen a penny of profit and has spent almost its entire existence as a public entity hammering out a huge head and shoulders pattern.
In my post at the start of last week I was looking at the escalating economic shock that is the closure of the Strait of Hormuz, but also noting that the lack of patterns on equity indices from the late March lows were nonetheless looking higher.
US equity indices haven’t gone up a lot since then, with the exception of an impressive performance on QQQ, but I’m still thinking that SPX and QQQ in particular may go higher still and have some trendline targets to put forward in the event that turns out to be the case.
First though I’d like to look quickly at the current status of the Iran War and then take you on a walk down memory lane looking at the weeks before the last really big crisis in equities, which was of course the early weeks of the pandemic in 2020.
(more…)Not to make too much of one day’s stock movement, but I truly believe the failed bullish breakout of Nvidia could be an important – – pardon the phrase – – turning point.
