"I write entirely to find out what I'm thinking, what I'm looking at, what I see and what it means. What I want and what I fear." Joan Didion

It is Not Where You Came From.......

  • But where you may be going. Wayne Gretzky had a famous quote "I skate to where the puck is going to be, not where it has been." He did not know it but he was also referring to the MONTHLY Nasdaq chart below. The bears would say it has made a nice move off the very round 10000 number and needs a pullback. Bulls would say it is simply on the path to least resistance as it rounds out a possible cup base just above 16000. Remember I frequently like to mention, trends once in motion tend to remain that way more likely than they are to reverse. In June the Nasdaq did record its first MONTHLY bullish MACD crossover in more than 3 years and its bullish habit since the start of 2023 continues with it CLOSING at highs for the MONTHLY range 5 of the last 6 examples. It will not be a straight line higher but in my opinion, this upward trajectory should continue toward that cup base peak, and then if it records a breakout it could be off to the races once again.

Participation Party:

  • Is the Nasdaq, which has been leading the market party, ready for another run? If the chart below of the New Highs versus New Lows is hinting at direction the answer could very well be affirmative. Friday completed a bullish island reversal with the gap up (after the gap down on 6/20) and also reclaimed the prior breakout above the bullish ascending triangle. Those who claimed that breadth was soft between mid-February to the end of May as the chart below shows New Highs-New Lows was in negative territory may need to find a new bearish narrative. Was Friday an outlier with the end of Q2 with window dressing and the like or was it for real? We shall see but seasonality over the last 4 years (recency bias) with July CLOSING higher than it started all 4 times rising by an average of almost 6% (its best month as well). AAPL along with several semiconductors and software names were on the list, a good sign. The back half of 2023 should be an interesting one.

Bitcoin Shrugging Off Bad News:

  • When a trading instrument ignores bad news and rises in PRICE that is basic bullish action. There has been news in the Bitcoin space that was not what many that were positive about the space wanted to hear, but it did not derail the recent uptrend. During a 6 of 8 session win streak between 6/15-23, it roared higher by 27% from the bottom to the top of the range. It has now CLOSED above the very round 30000 number 12 of the last 13 sessions and has now formed a bull flag, digesting that sprint higher very well. A move through 31000, which has been above the figure intraday 4 times recently, but zero of them have CLOSED above it, could ignite another run upward. It has been in this PRICE range before back in April and is maintaining the altitude well. Stocks in the group that should be watched include MSTR which was above a 347.73 cup base pivot Friday but could not CLOSE above it and COIN should be respected as long as it remains above the double bottom pivot of 66.46 it took out on 6/27 rising 13% in double average daily volume.

Divorcing Economics From PRICE Action:

  • Many market participants like to wonder why markets may be strong or weak based on underlying economic factors. Below may be a good example of why investors should pay very close attention to technicals and tune out most of the other "noise". The EWQ on Friday rose 1.5% in the face of major riots throughout the country. Last week it rose almost 4%, nearly doubling the gain in the S&P 500. The top holding in LVMUY is honing in on a cup with handle pivot of 190.80. Looking at other top 5 holdings, TTE recorded a bullish WEEKLY hammer candle last week off its rising 50 WEEK SMA, SNY broke ABOVE a bear flag at the very round 50 number, and LRLCY jumped almost 6% (nice diverse mix of sectors represented). I would never discount fundamentals and macro conditions, but I firmly believe that the technicals are quicker to pick up on changes in the underlying fundamental factors. The technicals will turn at tops and bottoms well before as they anticipate changes in the fundamentals. Of course, this instrument may very well turn lower sometime soon wait for PRICE action to confirm.

Industrial Backbone:

  • The industrials were the FOURTH best major S&P sector in the last 3 months, and over the YTD timeframe as well. On both occasions, there were bested by only the growth groups in tech, communication services, and consumer discretionary. As I have mentioned before the space has been one of the best in keeping close proximity to its 52-week highs, and last MONTH it surged above the very round par number which has been a thorn in its side. As consumers continue to crave experiences, the airlines have been the best actors for the last quarter and in 2023 thus far. On 6/27 the JETS took out a cup with handle pivot of 20.80, and the handle found a bounce at the very round 20 number. More importantly to me, the IYT, which has delivery services, rails, and truckers also surged through a cup with handle trigger of 244.65. It rose every day last week and broke through a WEEKLY bullish ascending triangle pivot of 246. Let's take a look at two attractive MONTHLY charts, which obviously have more implications for long-term investors in XPO and WM below.

XPO Logistics:

  • Transportation play up 77% YTD and 106% over last one year period.
  • Name 1% off most recent 52-week highs and has doubled in PRICE since April. Rose 15% last week and weeks ending 4/14-21 advanced by a combined 43% alone. Week ending 4/21 was accompanied by largest WEEKLY volume in 20 months.
  • Earnings reactions mixed up 3.4 and 2.1% on 5/4 and 10/31/22 and fell 14 and 2.3% on 2/9 and 8/5/22.
  • Enter on pullback into MONTHLY cup base breakout.
  • Entry XPO 57.  Stop 49.

Waste Management:

  • Waste play up 10% YTD and 13% over last one year period. Dividend yield of 1.6%.
  • Name 1% off most recent 52-week highs and on WEEKLY chart the round 170 number was resistance dating back to last summer. Last week broke above bullish WEEKLY inverse head and shoulders pattern.
  • Earnings reactions mostly lower off 1.2, .2, and 3.1% on 4/27, 2/1 and 10/26/22 and rose 2.8% on 7/27/22.
  • Enter after break above MONTHLY bull flag pattern.
  • Entry WM here.  Stop 165.

Good luck.

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"I write entirely to find out what I'm thinking, what I'm looking at, what I see and what it means. What I want and what I fear." Joan Didion

It is Not Where You Came From.......

  • But where you may be going. Wayne Gretzky had a famous quote "I skate to where the puck is going to be, not where it has been." He did not know it but he was also referring to the MONTHLY Nasdaq chart below. The bears would say it has made a nice move off the very round 10000 number and needs a pullback. Bulls would say it is simply on the path to least resistance as it rounds out a possible cup base just above 16000. Remember I frequently like to mention, trends once in motion tend to remain that way more likely than they are to reverse. In June the Nasdaq did record its first MONTHLY bullish MACD crossover in more than 3 years and its bullish habit since the start of 2023 continues with it CLOSING at highs for the MONTHLY range 5 of the last 6 examples. It will not be a straight line higher but in my opinion, this upward trajectory should continue toward that cup base peak, and then if it records a breakout it could be off to the races once again.

Participation Party:

  • Is the Nasdaq, which has been leading the market party, ready for another run? If the chart below of the New Highs versus New Lows is hinting at direction the answer could very well be affirmative. Friday completed a bullish island reversal with the gap up (after the gap down on 6/20) and also reclaimed the prior breakout above the bullish ascending triangle. Those who claimed that breadth was soft between mid-February to the end of May as the chart below shows New Highs-New Lows was in negative territory may need to find a new bearish narrative. Was Friday an outlier with the end of Q2 with window dressing and the like or was it for real? We shall see but seasonality over the last 4 years (recency bias) with July CLOSING higher than it started all 4 times rising by an average of almost 6% (its best month as well). AAPL along with several semiconductors and software names were on the list, a good sign. The back half of 2023 should be an interesting one.

Bitcoin Shrugging Off Bad News:

  • When a trading instrument ignores bad news and rises in PRICE that is basic bullish action. There has been news in the Bitcoin space that was not what many that were positive about the space wanted to hear, but it did not derail the recent uptrend. During a 6 of 8 session win streak between 6/15-23, it roared higher by 27% from the bottom to the top of the range. It has now CLOSED above the very round 30000 number 12 of the last 13 sessions and has now formed a bull flag, digesting that sprint higher very well. A move through 31000, which has been above the figure intraday 4 times recently, but zero of them have CLOSED above it, could ignite another run upward. It has been in this PRICE range before back in April and is maintaining the altitude well. Stocks in the group that should be watched include MSTR which was above a 347.73 cup base pivot Friday but could not CLOSE above it and COIN should be respected as long as it remains above the double bottom pivot of 66.46 it took out on 6/27 rising 13% in double average daily volume.

Divorcing Economics From PRICE Action:

  • Many market participants like to wonder why markets may be strong or weak based on underlying economic factors. Below may be a good example of why investors should pay very close attention to technicals and tune out most of the other "noise". The EWQ on Friday rose 1.5% in the face of major riots throughout the country. Last week it rose almost 4%, nearly doubling the gain in the S&P 500. The top holding in LVMUY is honing in on a cup with handle pivot of 190.80. Looking at other top 5 holdings, TTE recorded a bullish WEEKLY hammer candle last week off its rising 50 WEEK SMA, SNY broke ABOVE a bear flag at the very round 50 number, and LRLCY jumped almost 6% (nice diverse mix of sectors represented). I would never discount fundamentals and macro conditions, but I firmly believe that the technicals are quicker to pick up on changes in the underlying fundamental factors. The technicals will turn at tops and bottoms well before as they anticipate changes in the fundamentals. Of course, this instrument may very well turn lower sometime soon wait for PRICE action to confirm.

Industrial Backbone:

  • The industrials were the FOURTH best major S&P sector in the last 3 months, and over the YTD timeframe as well. On both occasions, there were bested by only the growth groups in tech, communication services, and consumer discretionary. As I have mentioned before the space has been one of the best in keeping close proximity to its 52-week highs, and last MONTH it surged above the very round par number which has been a thorn in its side. As consumers continue to crave experiences, the airlines have been the best actors for the last quarter and in 2023 thus far. On 6/27 the JETS took out a cup with handle pivot of 20.80, and the handle found a bounce at the very round 20 number. More importantly to me, the IYT, which has delivery services, rails, and truckers also surged through a cup with handle trigger of 244.65. It rose every day last week and broke through a WEEKLY bullish ascending triangle pivot of 246. Let's take a look at two attractive MONTHLY charts, which obviously have more implications for long-term investors in XPO and WM below.

XPO Logistics:

  • Transportation play up 77% YTD and 106% over last one year period.
  • Name 1% off most recent 52-week highs and has doubled in PRICE since April. Rose 15% last week and weeks ending 4/14-21 advanced by a combined 43% alone. Week ending 4/21 was accompanied by largest WEEKLY volume in 20 months.
  • Earnings reactions mixed up 3.4 and 2.1% on 5/4 and 10/31/22 and fell 14 and 2.3% on 2/9 and 8/5/22.
  • Enter on pullback into MONTHLY cup base breakout.
  • Entry XPO 57.  Stop 49.

Waste Management:

  • Waste play up 10% YTD and 13% over last one year period. Dividend yield of 1.6%.
  • Name 1% off most recent 52-week highs and on WEEKLY chart the round 170 number was resistance dating back to last summer. Last week broke above bullish WEEKLY inverse head and shoulders pattern.
  • Earnings reactions mostly lower off 1.2, .2, and 3.1% on 4/27, 2/1 and 10/26/22 and rose 2.8% on 7/27/22.
  • Enter after break above MONTHLY bull flag pattern.
  • Entry WM here.  Stop 165.

Good luck.