My charts are driving me insane. I see them all as part of one big story – but I just wish any one little part would give us a clearer view of the whole picture. So many conflicting chapters. So here we go.
Where else could I start …. Nvidia.
Once again, the weekly semi-log scale chart. The price poked its nose above the upper boundary of the beautiful up-slanting wedge and took fright putting in one of the most unattractive looking trading days which, as we can see, has carried through to the weekly. As mentioned before, I think once this enthusiasm wanes, we will see this stock fairly quickly back at 800. And as mentioned before, I don’t like to mention what it might eventually see on the downside.
And then turning to the NASDAQ – I look at this chart every day when I update it, but even after all this time, I hadn’t realized there is a perfect parallelogram taking in all the trading since last year’s low. Just look at the top boundary of this pattern. Short term, as with Nvidia, this index had a correction this week breaking the very short-term uptrend. On the lower part of the chart, again we have the total number of 52-week highs and lows. It eased back further this week and has now nicked below the line drawn on the chart. As well, volume on Friday was higher on the NASDAQ (as it was also on the NYSE). A very worrying overall picture.
Can’t go past the chart of the Dow. We have all been aware of the possibility of a perfect double top in this index. At the same time there is also a perfect diamond pattern. (Diamond patterns must have parallel lines to make the box). But also, we have the same type of long-term parallelogram which just happens to also be the lower edge of this blessed diamond pattern. Not much room for it to move here.
Another chart I absolutely can’t go past is Shanghai. Just look where it is sitting. The downtrend is a bit steep, so I am expecting it to have a rally here, but I think they are going to have to get the cheque book out and quick or we are going to see this index have another very nasty leg down.
And now one of the charts that I am very frustrated with. B.Com (black) as measured against the S&P (red). We really need that red line to start to improve if we are going to have a move in commodities. Note where the red arrows are. I can forgive it a bit more but ….
Then copper which seems to be doing a pretty good job of turning into my problem child again. Price of cash copper in red and COPX in black. Would prefer not to see COPX below the little shaded support area where it is currently sitting.
Oil – it has been hitting the headlines recently on a regular basis – this is the chart of USO – Oil fund.
Note how it came back into the shaded area and has since had a sharp little rally. A bit steep I think so I am looking for it to correct here. If it just comes back towards or into that shaded area again and then starts to improve, I think we may see a much bigger advance in oil prices.
It is the next two charts that are keeping me awake at night. At the top, the US dollar (DXY) – scale inverted - and below gold. Last week I was confident that the gold price would go up – it did for a day or two and then collapsed again back to near recent lows. Can it hold?
With the scale inverted of the dollar we see that they both track each other but certainly not perfectly. Remember what is support here on the dollar is actually overhead resistance. The shaded area on the chart goes on an on so a break here would probably have fairly ominous repercussions. But what we also need to keep in mind is that the market can often change the rules without letting us know. Just because gold has generally performed well with a weaker dollar, doesn’t mean it is always going to happen. However, it is something we are going to have to give considerable attention.
Back to our little part of the big picture, here again the XJO. As with the Dow, we have a perfect double top and – believe it or not the same blessed diamond pattern. We have actually just about only been bobbing up and down in the same range since the beginning of the year.
XMM – our mining index. Last week I included the weekly chart highlighting this big sideways pattern. We are trading along the bottom here. There is only one slightly encouraging point I can make here and that is that the Overbought/Oversold indicator is getting down too oversold. As we know markets don’t have to turn immediately when they get to oversold but at least it is something to watch.
Highlighted my favourite index XSR – small miners – during the week. Notice how it rallied a bit over the week to just run into the downtrend. At the same time, the Overbought/Oversold indictor here is down to levels rarely seen – the last time was February 2023. We need to watch the downtrend on the index now. But you can understand my frustrations with markets all being so tied in together at this time.
As if we needed anything else to worry about – this little history lesson is timely.
(20min delay)