And Just Like That...
The charts speak, and they do so loudly
ASK ME ANYTHING: what do the charts say now?
DATE: Tuesday, April 9
TIME: 5PM Eastern Time
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WHAT IS IT?
Join ETFYourself.com Founder Rob Isbitts as he updates subscribers and curious non-subscribers on how he is analyzing the current market environment. Rob will walk through a series of charts in English, not in confusing investment language, so that attendees can see what he sees without the usual Wall Street hype and arrogance.
Rob will emphasize 2 of his key investment tenets:
Risk management is THE priority, always (ABL: “Avoid Big Loss”)
The markets always tell us a story…we just have to listen
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Well, well. You think it is just going to be another week of the markets ignoring the many “elephants in the room,” from the unsustainable U.S. debt and enduring geopolitical conflicts, to inflation re-igniting and meme stocks multiplying. And then, just as in the re-boot of the popular TV series, “Sex and the City,” it happens.
No, Mr. Big didn’t suffer a sudden demise in this one. But the vicious selloff in the S&P 500 today left many wondering which of those looming threats the markets have ignored are suddenly very important. Let’s look at a few pictures and call it a day, since tomorrow’s monthly employment report will now have a bigger say in whether today’s fears are warranted, or if this cat with 9 lives (U.S. mega-cap stocks) reboots again, like that Carrie Bradshaw and crew did.
Clowns to the left of me, jokers to the right?
For those whose portfolios are overloaded with S&P 500/Nasdaq 100 heavyweights, the only thing more concerning about the chart on the left is…the chart on the right. They are both the S&P 500 index, and both are through today. The chart at left is daily prices, the right is weekly prices. What do I see?
The for the first time since last November the daily (left chart) has broken down through that narrow but persistent up trend “channel.” You can see the “get me out!” nature of today’s close. We’ve seen so many of these that immediately rebounded, I have to do 2 things: respect it, but don’t get too fixated on it. The lower end part of the chart is the PPO momentum indicator I use a lot, and it is showing a concerning “droopiness” (yeah, technical term there).
The chart at right (weekly prices) shows a similar pattern, but weeklies are more important since they don’t move as easily as shorter-term charts. Most significant here is the PPO, which has been high but hasn’t “crossed” (blue line dives under white line)…until today. So barring a strong rebound tomorrow, that breakdown in the PPO ought to stick.
The bigger issue is not whether the market pulls back a bit. It is that it had such a strong move up since Halloween last year, there is potential for a small reversal downward to snowball. Yes, snowball, even as spring approaches.
Inflation? So says the commodities market.
This is what I’d call a breakout worth paying attention to. This ETF invests in commodities, about half in energy (oil, natural gas, gasoline) and the rest in precious metals like gold, and in a range of agricultural inputs (wheat, soybeans, corn, etc.).
What I see here is a another good chance at a serious trend shift, from rangebound commodity prices to a lift above a down trend line that goes all the way back to the summer of 2022. Commodity price acceleration higher is one of the tell-tale signs that inflation is rising again, or that at least the markets are concerned about it. Very much one to follow, and I will.
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The WEEKLY CHART BITES tab, containing all of my latest snapshot technical commentary, is now updated in the shared research deck.