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Conservative Stance? There are a myriad of ways that investors determine if the market is in a risk on or off environment, and one of them is the ratio chart below comparing consumer discretionary to staples. The XLY is still in firm control as it bull flags but things can quickly change if the pattern breaks to the downside as we know from FALSE moves can often come fast one's in the opposite direction. I was surprised to see just how weak some of the staple names have been including former COVID favorite CLX which has fallen 23 of the last 29 weeks and even the bullish morning star completed the week ending 2/21 could not give the name a bounce (notice doji candle week ending 2/14 too). CPB is lower 8 of the last 9 months, since a bearish shooting star at the very round 50 number last September, and June so far is looking for its first CLOSE below its 200 MONTH SMA in at least a decade and is now trading below the COVID era depths. Sure one would expect these to lag after a vigorous 2-month rally but as the XLP trades just 4% off its most recent 52-week highs CLX and CPB are 28 and 38% off their most respective annual peaks, very poor relative strength. 

Turbulence Ahead? The airline group inside the diversified industrial space is at a familiar altitude, pun intended. The daily chart below of the JETS shows it in a tight range between 21-23 the last 3 weeks, an area it traded within in early to late March. Interestingly this ETF did not bottom like the overall market did on 4/7, but on 4/9 flying more than 17% in well more than double the average daily volume. Looking at its MONTHLY chart May completed a bullish morning star pattern, after a hammer candle in April and notice the bearish evening star completed in August 2023 with the rare doji in July (three others occurred near the top of the last decade in February, July, and December 2019). Influential stocks in the group include LUV, and talking about how dojis are well known for projecting tops (or bottoms near lows) at highs did so on 3/24. It is just above a cup with handle trigger of 32.99, although it did record 3 straight dubious candles to end last week with a doji, shooting star, and a spinning top. Not a traditional airline, but an aviation disrupter in JOBY is worth a look. The single-digit name, not my cup of tea, could be taken advantage on the long side with a gap fill near 7 from the 5/27 session. Notice it was halted at the very round 10 number with just one CLOSE above on 1/7, but this could be headed back there sometime in the second half, especially after the confidence boost after the TM investment. 

Nasdaq Thrust: Many like to proclaim a true rally can not occur without the financials. I would say technology is more important and the MONTHLY chart below of the Nasdaq shows the infrequent contact with the 50 MONTH SMA. It was nearly precise in touching the secular line and was a 50% retracement from the run from the very round 10000 to 20000 from October 2022 to last December. Where is its near-term likely path from here? The WEEKLY timeframe has a nice look to it, with a bullish piercing line and engulfing candle during the weeks ending 4/11 and 4/25, both rising by 7% (those were both the best returns since the week ending 11/11/22 that rose by 8.1%). Both CLOSED in the upper half of the WEEKLY range and it now has a path to the 50 WEEK SMA which is just above the 18000 figure. In hindsight, the rare contact with the oversold 30 RSI number was an excellent signal. Notice on the DAILY chart the third time was the charm in breaking above the bear flag breakdown, which did meet its measured move lower of roughly 2500 handles. My feeling is this still has another 1000 handle run, on the daily timeframe that will be near the declining 200-day SMA. If and when that occurs we can reassess from there.

Sanguine Approach: It is extremely hard to determine if we are closer to the bottom or the top here, and trying to catch the precise low is a fool's game. In this environment, it is best to be tactical, keep losses very small, and have plenty of cash on hand. If one ones to take the path less traveled, and look for long opportunities next week demand names that have some technical merit. The discretionary space as a whole has been a disaster thus far in 2025 with the XLY down more than 18%, the tenth best of the 11 major S&P sectors. Of course, this is due to TSLA now off 51% from most recent 52-week highs and the WEEKLY chart shows it has advanced just 2 weeks this year, although the last 4 have recorded two bullish hammers and two inverted ones. AMZN is on a 9-week losing streak, its worst in at least 5 years dating back to an 8-week run the weeks ending between 4/1-5/20/22. Notice those were not the ultimate lows but it did push firmly off the very round par number, before the time frame between August 2022 and the rest of the year never recorded back-to-back WEEKLY gains. Looking under the hood however on Friday there were names displaying solid relative strength. Below is the daily chart of FLUT, a Druckenmiller play, and could be a good play after a doji candle Friday at the very round 200 number.

Not Recessionary Behavior:  Is copper strength signaling that a recession is not in the near-term future, or is it forecasting continued China firmness? That is a question for those who try and look smart. We are just trying to make money, and the daily chart below shows how leading instruments will offer add-on buy points on the way UP, contrary to popular opinion. As well, we know the best breakouts tend to work right away and that occurred with the move above 4.45 and now is sporting a bull flag formation. Notice the double bottom at 4 with a bullish hammer on 11/14, and the completion of a morning star on 1/3, and the golden cross from the beginning of March. The MONTHLY chart has a sanguine look with a bull flag that started at the COVID era lows right at the "round" $2. A CLOSE above a 4.75 pivot in March would be the first in the last decade and could carry a measured move to 6.50. There were 6 months that traded above 4.75 intramonth dating back to May 2021 but ZERO of them finished above 4.75 (March 2022 CLOSED right at 4.75).