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Now that I actually have a seat wider than 10 inches, I can relax and type a few words about the exiting Friday we had. Let’s review a few key index charts together, shall we?
We begin with the NASDAQ Composite which, exactly in line with my Dancing Beneath the Ceiling post, saw its momentum wane and prices plunge. It’s funny seeing all the different mass media try to dream up a reason. One said it was tariffs. Another said a new Covid. Another said Trump in general. It honestly doesn’t matter.
In December I was leaning towards seeing a retracement / consolidation on Crypto in the first half of this year and then strong new highs towards the end of the year with possible bull market highs pencilled in for Nov/Dec 2025.
That retracement / consolidation is now in progress and I’ll be looking today at the key support levels I’ll be watching on what I expect to be a bullish consolidation.
Is it possible that the Crypto bull market has already ended? Yes, but I’m leaning against that. I’ll be explaining why that is in my next post.
(more…)Here’s a very interesting little chart: it shows how correlated equities are over the span of years. When the level is high, correlation is very high, which means you might as well just buy the SPY and forget it. When the level is low, it means stocks are all over the place, and it pays to be a good stock picker (using, let’s say, SlopeCharts).
In this instance, we are at incredibly low levels, suggesting that we’ve finally got a market which is amenable to good old-fashioned charting!
In my last post on Monday 10th Feb I was looking at the bull flag setups on SPX and QQQ and the historically bullish lean into yesterday and projecting that we might well see retests of the all time highs in that bullish window. We saw that all time high retest on QQQ on Friday and on SPX yesterday. So what now?
Well we now have impressive topping patterns on SPX and QQQ and a bearish window has started that runs through to the end of February, with notably bearish leaning days on Thursday and Friday this week, Monday 24th Feb and Friday 28th Feb. We will see how that develops.
On SPX the bullish setup I was looking at last week was a bull flag megaphone and that delivered a very marginal new all time high yesterday. The bearish pattern setup here is now a possible nested double top.
(more…)I have purchased August $67 puts on Super Micro Computer Inc. (SMCI, whose name sounds straight out of 1982). It has rallied about 200% over the past three months, largely out of joy that it isn’t going to get delisted (which was a real concern then). My view is that the gap at 65.86, as well as the descending triangle, make a formidable right triangle top, and that this obscene rise in price is close to an end. I might be a day or two early with this one, but that gap level is the key.
