Conflicting Signals:
As we head into Q4 the markets overall are acting well with all 11 major S&P sectors in the green YTD by at least double digits with utilities leading and energy in the basement. Technology has had a mediocre year up 16% right in the middle of the pack via the XLK. The MONTHLY chart of the Nasdaq below has been a head-scratcher. It has felt trendless and the last 3 candles have been debatable. On the WEEKLY chart, one can see last week traded right into the doji candle (well known for their ability to predict changes in the prevailing direction) from the week ending 7/12, the middle candle from a bearish evening star. In my opinion, this type of wide and loose trade is indicative of toppy behavior. Many are speaking to the bullish seasonality and perhaps that will make any meaningful upward trajectory for tech difficult. The daily Nasdaq chart Wednesday filled in a small gap (rare for a benchmark) from the 9/18 session and is retesting the breakout above a symmetrical triangle. I would not be surprised which way this traded over the near term. Keep powder dry for a potential late 2024 election rally.