Chartsmarter Insights

"Asset" or Liability: The asset managers of the finanical group are drumming to their own beat. Some have acted well and are trading near 52-week highs like leader BAM, but this one looks vulnerable with bearish divergence as 3 lower RSI highs corresponded with 3 higher PRICE moves since late last October. It did complete a bullish morning star on 2/13 and the next session gapped up completing a bullish island reversal (after the gap down on 2/3) but these are more reliable signals near lows. Add to that it filled in an upside gap from the 1/31 session and Tuesday traded into a bearish engulfing candle from 1/30. Below is peer BLK which has been behaving a bit weaker, where BAM is 3% off its most recent 52-week highs, Blackrock is 11% off its own annual peak. It does have some positive attributes but has to hold Tuesday's intraday low of 959.07 on a CLOSING basis. The notes on the daily chart are self-explanatory (two spinning tops on 1/30 and 1/31 after a double bottom breakout pivot of 1057.59 were a canary in the coal mine for the coming weakness with such a quick breakout failure) and notice there is some room lower if that stop is taken out on the MONTHLY chart to the very round 900 number to retest a prior cup base breakout (notice the doji candle that started the pattern in December 2021 which led to a 400 handle haircut. The only other doji since 2017 was last December. 

Benefit of the Doubt: Although I am not an index trader, I admit I have been hesitant about being sanguine regarding the Nasdaq's prospects. I still am a bit but my tune is changing quickly. My big green light will be a decisive CLOSE above the very round 20000 figure. Notice it is still trapped between the 19000 and 20000 range basically since November. Contrary to many technical beliefs that the more times a line is touched the greater the support or resistance becomes, I think the opposite. The Nasdaq in my opinion is becoming more familiar with this PRICE territory and therefore more comfortable. Notice the Bollinger Bands are tightening, much like they did just before the election, and that is a good indication that a big move is imminent (the direction is ambiguous). Comforting the bears belief that 20000 is a brick wall is the numerous dubious candlesticks there including a harami on 12/17, a doji on 1/6, and a dark cloud cover on 1/24. It has not been able to record 3 straight daily CLOSES above 20000, but this week has the first WEEKLY CLOSE above 20000 after 5 prior weeks were above it intraweek dating back to last December. We are now past earnings season for most of the notable tech names and survived, another notch the bulls can put in their hat. Paint me bullish. The onus is on the bears here and next week feels like it will determine the near-term trend for the first quarter at least. The long weekend will not provide much comfort for the uneasy grizzlies.

When the Facts Change..... I do to sir, what do you do? My belief has been a bearish slant with technology lagging in 2025 (it is now the second worst major S&P sector on a YTD basis) but the group has to be given credit for shrugging off some poor mega-cap moves. Names like AMD which is now more than 50% off its most recent 52-week highs (filled in gap from 2/5 Thursday and CLOSED well off session highs) without the courtesy of a 2:1 split (a weak stab at humor). MSFT is UNCH over the last year period, GOOGL slipped 7% after an ill-received earnings reaction and perhaps it will fill in its gap near 176 from 12/9. TSLA was more than one-third off its annual peak but recorded a bullish harami on Wednesday and Thursday followed through by 6% as a potential double bottom base takes shape. Despite all this, the Nasdaq is now just 1% off its all-time highs. Call me still skeptical with the index doubling off the start of 2023 lows, but the market could care less about my opinion. The WEEKLY chart here shows the back-to-back doji candles to end 2022 and start 2023 at the very round 10000 number to the present PRICE of 20000. Perhaps this is just a bull flag with a measured move to 23000 on the horizon. The daily chart below shows a push above the diamond pattern, and for me to give a bearish outlook does not make sense anymore even with many individual stocks blowing up on earnings. This will be the year of the stock picker.

Silver Lining: Silver was a solid actor Wednesday, up better than 1% as its precious metal rival gold was UNCH, an interesting divergence. It normally has a strong correlation with another commodity in copper, and that has been the case since the start of 2025 as seen here. An alternate view of looking at the daily chart of silver is the bull flag that began at the round 30 number and a break above 33 would carry a measured move to 36 which would obviously clear the double bottom with handle trigger of 33.32 seen below. On its WEEKLY chart, it recorded a doji candle, just the fourth one in the last 2 years, two of which were inconsequential, and the end of 2022 example saw a quick thrust lower before the metal bounced at the very round 20 number. The MONTHLY chart shows how important the round 30 number is, as it is the level where a long cup base broke out from last May (notice how the number was a hindrance in August 2020 and February 2021). That wall of former resistance has now likely turned into support and the measured move is to 43.