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Friday, May 19, 2023

Weekly Wrap-up For Stocks, Fast Money, Gold, and more...

 In case you're new to this; "bearish capitulation" is a term for a point in markets where the bears finally give up. Conversely, bulls capitulate at or near the end of a sell-off. 

Part of the process of creating capitulation points in markets is that "whoosh" moment, when all your short term charts break, and that's why I don't spend a lot of time charting very short term timelines.

There are times when even the long term charts will break, as they did during the covid liquidity bubble of 2020. I'm talking about the monster rally that ensued once the election was in the bag - and trillions of dollars were injected into the global economy. 

There was a point where I actually decided to abandon the charts for several months, rather than wait for the momentum to dry up, which actually didn't happen until around the end of 2021.    

$NDX - 20 year chart (monthly candles) Here's a good view of every event I just laid out, above 

Getting back to the short term charts:

$DJUSTC (Dow Technology) 30 min. view - This is a good example of what short term tech traders were seeing yesterday, as the charts continue to breakout 

In fact, I've been able to delete, and archive several chart views we've been watching for the past several months, as tech has continued to break out, and even some long term charts. 

Of course, I predicted that the $QQQ, and Wall Street's beloved FAANG stocks, would continue to drive the market higher, and that's exactly what we've seen over the past several weeks. 

That was back on April 24th: 

Weekly Wrap-up, and a Look Ahead as Focus Turns to Tech Earnings

Back when I recognized that NVIDIA, and the rest of the Q's were being used to drive the market. 

From that update:


Because this just happens to be one of the top 10 holding in the $QQQs, and this market is all about juicing the QQQs. I'm sure you've seen the endless commercials.... 

Related: April 4th

 Here's yet another major component of the QQQ's being pumped on Friday 

 $AMZN  Amazon

This helps explain why $NFLX was seen rallying 10% yesterday. 

 Today's Trade 

Today - the 3X Tech long charts will breakout, in order to cause the bears to capitulate, or risk remaining trapped in that losing position over the weekend. 

If you were able to stick with this trade for the entire year, you're up 100%. 

Of course those who continue to trade the broader market have been left waiting for a lousy breakout above 4200, when market futures have been pointing to that level for several weeks.  

For comparison

The $SPY is only up 10% over the same time period 

What's worse is what if you chose to try to avoid volatility, by investing in the $SPLV (S&P 500 Low Volatility ETF) you are actually down for the year! 

$SPLV - $SPX Low Volatility ETF - Down for the year 

That's right. all those Bloomberg guests who came on the air to predict that, "Volatility is here to stay", all lost money. 

Gold Miners failed to hold support at the 50 day average, and I suppose what we just saw was a sector rotation out of metals, and back into Tech. 


Fast Money gets it wrong again - 1 month ago encouraging people to buy gold  

Pushing Newmont on April 4th 

And lastly Fast money's Tim Seymour liking the $GDX at the 33 level, just this week lol 

Have a great weekend, 

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