Chartsmarter Insights

No Tariffs on Stock PRICES: Certainly, the above statement is a weak stab at humor, but Chinese ETFs are standing tall in 2025 for the most part. Below is the daily chart of the KWEB, whose only blemish was the recent doji candle which should have had long shareholders at least shaving around a core position. It is now just 2% above a double-bottom and that could be a logical spot for those who missed the nascent strength to initiate a position. On its WEEKLY chart, last week completed a bearish evening star pattern that also traded into a former ugly engulfing candle the week ending 10/11/24 that dropped 9%. The MONTHLY chart will need to show a CLOSE above the 50 MONTH SMA in March which would be its second straight since July 2021 (notice the bearish gravestone doji candle at the very round 90 number from February 2021 that started a long slide). BABA has to be considered best in breed but with a possible bearish MACD crossover and being extended look for this to trade back toward its cup base breakout pivot of 117.92 from 2/12 before a resumption of the uptrend (notice the dojis from 10/2 and 10/7/24 that commenced the cup pattern).

Tech Wakes Up: The old saying goes "it's not how you start, but how you finish". That can apply very well to the stock market and boy did it do so Friday. The Nasdaq CLOSED nearly 500 handles off its lows and give the bulls credit in doing so to end the week as Mondays have been generally soft. And the benchmarks did something that classic bull markets do, open near the lows and CLOSE on the highs. Am I declaring this a bull market again? That is hard to say but one now has a very clear area to play against on the long side. At the intraday lows Friday the Nasdaq was 10% off its recent highs, jibberish for a correction, although it was violent and swift in nature. One day does not satisfy my concern but it is a good start and Monday will start the new month where inflows take place. The MONTHLY chart did record its third straight dubious candle and notice the bearish RSI divergence since the start of 2018. That was why PRICE action is omnipotent, as if someone was cautious over that they would have sat out a huge bull run. Pick your bias with the semis after a big NVDA report this week as the SOXX MONTHLY chart sports a bull flag. Bears will point to the doji candle last August, and the last 5 months all CLOSING well into the lower half of the range with long upper wicks. I am sure you have heard it ad nauseum this is a stock pickers market and not one to be a hero in. As Zanger has said there is 1 or 2 times a year where the market has a clear, powerful trend and you can really step on the accelerator. This is not one of them.

Election Gap Filler: As maddening stats abound regarding sentiment, especially how close we are to all-time highs could it be as simple as we as just rangebound? That argument could have been made before Thursday's plunge with the 19000-20000 range undercut, but trade has been a bit sloppy, (wide and loose PRICE action), and after a doubling of the Nasdaq from 10000-20000 it does feel like it is exhausted. This is a time to be very small or on the sidelines. I was slightly bullish a couple of weeks ago, but only if the tech-heavy benchmark could distance itself from the very round 20000 figure. That never happened, and the daily chart below shows how capital has been rotating overseas comparing it to the Dax (Germany) since the election. Of course, this is even more pronounced against China as seen here. The softness started in 2025 and looking at the RSI in the mid-20s, where it was just before the Nasdaq started acting well against China perhaps we will see the nascent relationship start to unwind and tech firm. With the MONTHLY chart coming tomorrow the Nasdaq is looking at a third straight negative candle beginning with last December's bearish shooting star (January spinning top). All 3 months were above 20000 intramonth, but none CLOSED above and it is doubtful Friday will advance 1500 points.  

"Bit" by Bit:   As everyone fawns over NVDA tonight, Bitcoin is probably at the back of plenty of investor minds. PRICE is quickly descending to the 200-day SMA with an RSI in the mid-20s and it should see at the very least a dead cat bounce soon. The quick failure of a double-bottom breakout of 102,750 was a good indication that a drawdown was forthcoming as we know the best breakouts tend to work right away, and those that fail rapidly are red flags. Two of the main individual names aligned with the asset are MSTR and COIN. With the former, candles have been helpful determining risk on and off with the ugly bearish engulfing on 11/21, a session that witnessed a 150 handle daily range which was above the very round 500 number intraday but CLOSED below 400 (Wednesday registered a bullish piercing line). A bullish harami cross (doji) on 1/2 started a small run that can now be interpreted as a double bottom base if the stock can find its footing here. Below is the daily chart of COIN and this looks like selling pressure could be exhausting itself if it can bounce at the very round 200 figure. On its WEEKLY chart, the last 2 CLOSES below the 50-WEEK SMA produced very quick comebacks with PRICE doubling from 50-100 in and then from 150 to beyond 300. There is still plenty of week left with NVDA this afternoon but is something to think about. This is a trendless environment, with a downward bias, and it makes sense to keep size very small until a formidable direction ensues.

Equipment Check:  Healthcare has been sprouting its wings overall with the XLV sporting a bullish inverse head and shoulders formation. A break above 149 could see a potential measured move to 163. Looking inside the diverse space, pharma has been leading biotech since the election last year, and that could be a sign of "risk off" as long as that relationship remains in play. The PPH trades in an illiquid fashion but does give a good indication of what is happening beneath the surface and it is now distancing itself from its 200-day SMA. Below is the daily chart of the IHI and this is showing excellent relative strength against sector rivals. This ETF is trading at 52-week highs, while the PPH, XLV, XBI, and IHF are all trading 7-14% from their recent annual peaks. The WEEKLY chart traded very tautly and it is just above a 3-week tight pattern with the 3 weeks ending between 1/24-2/7 all CLOSING within just six pennies of each other, not a typo. From that type of coiled digestion can come explosive moves upon breakout. The bears are not giving up however as the breakout has not made much headway, as we know the best breakouts tend to work right away, and the last 4 WEEKLY candles were two shooting stars followed by the last 2 weeks registering spinning tops. The burden of proof is still on the bears though as PRICE has not broken down yet in any meaningful way.