"We write to taste life twice, in the moment and in retrospection." Anais Nin

Desolate Dow:

  • I spend very little time critiquing the Dow as the Nasdaq, S&P 500, and Russell 2000 all command my attention. Of course, we know that even though it is called the Dow Jones Industrials, that is an outdated reference. Just 5 of the 30 names inside the index are actual industrials. But could its PRICE action improvement be a sign that the rally is broadening out as the benchmark is now a more diverse bunch of characters? I remember when the Dow was holding up better than the other aforementioned major averages because it was a PRICE weighted and AAPL had less influence on its direction than it did on the top-heavy S&P 500 and Nasdaq where it was a top holding. The Dow did take a ding this week as its only member above 400 in UNH stated healthcare inflation could be an issue. Ironically it is the "old tech" names that are holding the Dow up with MSFT CRM AAPL, CSCO INTC, and IBM. Big Blue still pays a dividend yield near 5% and is on a 6-week win streak and CSCO flirted with a 52.66 cup base pivot. With the Dow up just 3% YTD compared to the S&P 500 by 15, Nasdaq by 31 and the Russell 2000 by 6%, perhaps its time for the selection committee to kick out laggards like WBA VZ and DIS and replace them with ORCL HPQ and TXN, all decent dividend players to boot. Technically the chart looks pretty good here on the cusp of a breakout above a bullish ascending triangle. 

Copper Solidifying:

  • Dr. Copper looks rejuvenated. Recently we took a look at the commodity as it undercut its 200-day SMA on 5/10, and we know the saying nothing good happens below that line. But it spent just a month below the secular line before recapturing it last week. That is a good sign and the chart below shows a possible double-bottom pattern developing. Is this a sign that perhaps a recession is off the table? Copper is now on a 3-week winning streak after a bullish hammer candle the week ending 5/26. FDX may be offering clues to that as it broke above a double-bottom pivot of 234.25 last Thursday but undercut it Friday (it REPORTS earnings after the CLOSE Tuesday). The 2 most recognizable names in the space are SCCO and FCX, and I have always preferred the former. Southern Copper filled in an upside gap from the 5/10 session last week but looks poised to travel toward a double-bottom trigger of 79.92. It trades 9% off the most recent 52-week highs compared to FCX by 15%.

Natural Gas Compression:

  • Sticking with the commodity theme and thinking the economy is not as bad as advertised the chart below of natural gas suggests continued strength. The CRB index jumped more than 4% last week, glancing at the overall basket of goods. WEAT added more than 7% last week in the best WEEKLY volume in 7 months. CORN screamed higher by 11% for its best WEEKLY advance since early March 2022. Getting back to natural gas the bears have in my opinion had their opportunity to push this lower and it is heading higher toward the high of the 2-3 range, and the bottoming process has occurred in a gradual, rounded fashion just what you want to see if you are bullish. Remember just last August natural gas was the victim of round number theory as it traded as high as 10.03 before a huge decline to 2. Stocks in the arena like RRC are stalking out a double bottom trigger of 29.08 and EQT has continued higher from its break above a bullish inverse head and shoulders pivot of 35. EQT I still believe will trade toward the very round 50 number in short order, after it rids temporary resistance at the 40 number this week.

Semis Telling A Story:

  • If technology is to keep steam rolling upward the semiconductors are going to have to do some of the heavy lifting. They have done their fair share so far in 2023 with the SMH up 50%. Has the easy money been made in the group? Looking at the WEEKLY chart below it certainly is at an inflection point, and bulls and bears can paint their bias. Bulls would say this looks like it is on the cusp of a long cup base breakout dating back to late 2021, and the bears would declare a possible double top here. Of course, no one knows for sure but I stand on the bullish side as last week jumped more than 4% after the prior 3 weeks all CLOSED very taut all within just 1.22 of each other. One thing we can do is look at some of the top holdings technically and see where they are at. NVDA is up almost 300% from last October's lows and I was one that thought the very round 400 number would be a speed bump, but I was WRONG. TSM is looking more comfortable above par and a recent double-bottom breakout and AMD has recorded back-to-back bearish WEEKLY dark cloud cover candles. Even INTC jumped more than 16% last week in the largest WEEKLY volume in at least 5 years. Advantage bulls in my opinion on the semi-space. 

Mothers Milk:

  • I frequently like to mention that a healthy market will produce numerous breakouts, in a diverse group of sectors. Technology of course this year is where many of those emanate from, and one way to analyze how the overall theme is doing is with the chart below of the FFTY. It is an illiquid one but it does give one an idea of how breakouts are trending. Here is the WEEKLY chart and there are green shoots here with the first WEEKLY close above the 50 WEEK SMA in more than a year and a half. Notice how round number theory came into play with the 50 figure in Q4 '21. The ETF has been acting well following a doji candle to begin 2023 and then a series of very taut WEEKLY CLOSES in May that we know often inspire potential big moves higher. Looking at the top 10 holdings include healthcare names like AMPH and INSP, staples in ELF and CELH, discretionary in DKNG and RCL, and tech with ACLS and IOT. Some could look at this as a "risk on" signal along with the IPO ETF. Let us take a look at a couple of names that may join the holdings in this ETF if PRICE keeps improving in AKAM and LSCC.

Akamai:

  • "Old tech" name up 9% YTD and 5% over the last one year period.
  • Name 7% off most recent 52-week highs and advanced 10 of last 14 weeks. Recently broke a string of lower WEEKLY highs dating back to last May and 50 WEEK SMA starting to curl higher.
  • Earnings reactions mostly higher up 8.4, 6.2, and 1% on 5/10, 11/9, and 8/10/22, and fell 10.4% on 2/15.
  • Enter with buy stop above bull flag.
  • Entry AKAM 93.  Stop 91.

Lattice Semiconductor:

  • Semi play higher by 37% YTD and 98% over last one year period.
  • Name 8% off most recent 52 week highs and back above nasty bearish WEEKLY engulfing candle week ending 11/26/21 that fell more than 10% (the prior week was a doji candle). Up 10% last week, doubling the gain of SMH although it did finish off intraweek highs.
  • FOUR straight positive earnings reactions (also 7 in a row) up 2.5, 7.9, 8.4, and 2.5% on 5/2, 2/14, 11/1 and 8/2/22.
  • Enter after recent gap fill/add above cup with handle.
  • Entry LSCC here.  Stop 85.

Good luck.

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"We write to taste life twice, in the moment and in retrospection." Anais Nin

Desolate Dow:

  • I spend very little time critiquing the Dow as the Nasdaq, S&P 500, and Russell 2000 all command my attention. Of course, we know that even though it is called the Dow Jones Industrials, that is an outdated reference. Just 5 of the 30 names inside the index are actual industrials. But could its PRICE action improvement be a sign that the rally is broadening out as the benchmark is now a more diverse bunch of characters? I remember when the Dow was holding up better than the other aforementioned major averages because it was a PRICE weighted and AAPL had less influence on its direction than it did on the top-heavy S&P 500 and Nasdaq where it was a top holding. The Dow did take a ding this week as its only member above 400 in UNH stated healthcare inflation could be an issue. Ironically it is the "old tech" names that are holding the Dow up with MSFT CRM AAPL, CSCO INTC, and IBM. Big Blue still pays a dividend yield near 5% and is on a 6-week win streak and CSCO flirted with a 52.66 cup base pivot. With the Dow up just 3% YTD compared to the S&P 500 by 15, Nasdaq by 31 and the Russell 2000 by 6%, perhaps its time for the selection committee to kick out laggards like WBA VZ and DIS and replace them with ORCL HPQ and TXN, all decent dividend players to boot. Technically the chart looks pretty good here on the cusp of a breakout above a bullish ascending triangle. 

Copper Solidifying:

  • Dr. Copper looks rejuvenated. Recently we took a look at the commodity as it undercut its 200-day SMA on 5/10, and we know the saying nothing good happens below that line. But it spent just a month below the secular line before recapturing it last week. That is a good sign and the chart below shows a possible double-bottom pattern developing. Is this a sign that perhaps a recession is off the table? Copper is now on a 3-week winning streak after a bullish hammer candle the week ending 5/26. FDX may be offering clues to that as it broke above a double-bottom pivot of 234.25 last Thursday but undercut it Friday (it REPORTS earnings after the CLOSE Tuesday). The 2 most recognizable names in the space are SCCO and FCX, and I have always preferred the former. Southern Copper filled in an upside gap from the 5/10 session last week but looks poised to travel toward a double-bottom trigger of 79.92. It trades 9% off the most recent 52-week highs compared to FCX by 15%.

Natural Gas Compression:

  • Sticking with the commodity theme and thinking the economy is not as bad as advertised the chart below of natural gas suggests continued strength. The CRB index jumped more than 4% last week, glancing at the overall basket of goods. WEAT added more than 7% last week in the best WEEKLY volume in 7 months. CORN screamed higher by 11% for its best WEEKLY advance since early March 2022. Getting back to natural gas the bears have in my opinion had their opportunity to push this lower and it is heading higher toward the high of the 2-3 range, and the bottoming process has occurred in a gradual, rounded fashion just what you want to see if you are bullish. Remember just last August natural gas was the victim of round number theory as it traded as high as 10.03 before a huge decline to 2. Stocks in the arena like RRC are stalking out a double bottom trigger of 29.08 and EQT has continued higher from its break above a bullish inverse head and shoulders pivot of 35. EQT I still believe will trade toward the very round 50 number in short order, after it rids temporary resistance at the 40 number this week.

Semis Telling A Story:

  • If technology is to keep steam rolling upward the semiconductors are going to have to do some of the heavy lifting. They have done their fair share so far in 2023 with the SMH up 50%. Has the easy money been made in the group? Looking at the WEEKLY chart below it certainly is at an inflection point, and bulls and bears can paint their bias. Bulls would say this looks like it is on the cusp of a long cup base breakout dating back to late 2021, and the bears would declare a possible double top here. Of course, no one knows for sure but I stand on the bullish side as last week jumped more than 4% after the prior 3 weeks all CLOSED very taut all within just 1.22 of each other. One thing we can do is look at some of the top holdings technically and see where they are at. NVDA is up almost 300% from last October's lows and I was one that thought the very round 400 number would be a speed bump, but I was WRONG. TSM is looking more comfortable above par and a recent double-bottom breakout and AMD has recorded back-to-back bearish WEEKLY dark cloud cover candles. Even INTC jumped more than 16% last week in the largest WEEKLY volume in at least 5 years. Advantage bulls in my opinion on the semi-space. 

Mothers Milk:

  • I frequently like to mention that a healthy market will produce numerous breakouts, in a diverse group of sectors. Technology of course this year is where many of those emanate from, and one way to analyze how the overall theme is doing is with the chart below of the FFTY. It is an illiquid one but it does give one an idea of how breakouts are trending. Here is the WEEKLY chart and there are green shoots here with the first WEEKLY close above the 50 WEEK SMA in more than a year and a half. Notice how round number theory came into play with the 50 figure in Q4 '21. The ETF has been acting well following a doji candle to begin 2023 and then a series of very taut WEEKLY CLOSES in May that we know often inspire potential big moves higher. Looking at the top 10 holdings include healthcare names like AMPH and INSP, staples in ELF and CELH, discretionary in DKNG and RCL, and tech with ACLS and IOT. Some could look at this as a "risk on" signal along with the IPO ETF. Let us take a look at a couple of names that may join the holdings in this ETF if PRICE keeps improving in AKAM and LSCC.

Akamai:

  • "Old tech" name up 9% YTD and 5% over the last one year period.
  • Name 7% off most recent 52-week highs and advanced 10 of last 14 weeks. Recently broke a string of lower WEEKLY highs dating back to last May and 50 WEEK SMA starting to curl higher.
  • Earnings reactions mostly higher up 8.4, 6.2, and 1% on 5/10, 11/9, and 8/10/22, and fell 10.4% on 2/15.
  • Enter with buy stop above bull flag.
  • Entry AKAM 93.  Stop 91.

Lattice Semiconductor:

  • Semi play higher by 37% YTD and 98% over last one year period.
  • Name 8% off most recent 52 week highs and back above nasty bearish WEEKLY engulfing candle week ending 11/26/21 that fell more than 10% (the prior week was a doji candle). Up 10% last week, doubling the gain of SMH although it did finish off intraweek highs.
  • FOUR straight positive earnings reactions (also 7 in a row) up 2.5, 7.9, 8.4, and 2.5% on 5/2, 2/14, 11/1 and 8/2/22.
  • Enter after recent gap fill/add above cup with handle.
  • Entry LSCC here.  Stop 85.

Good luck.