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"Your habits will determine your future." -Jack Canfield Affirmative Routines: In markets as in life, good habits are critical to success. Looking at the MONTHLY chart below, I believe the path to least resistance is higher after Friday's nice reversal to recoup virtually all of Thursday's losses. It is looking to keep a streak alive, with a possible fifth MONTHLY CLOSE at or very close to finishing at highs for the MONTHLY range. The cup base began at the very round 10000 number in late 2021 and a decisive move above it would carry a measured move to 22000. Of course, that could take a couple of years, if at all. The tech-heavy benchmark is well rested, after a long supportive cushion at the 50 MONTH SMA from last June to this March. On the MONTHLY RSI, one can see there tends to be a 2-year run of trading entirely above the overbought 70 figure, and then a year of swimming below it. It is due for a move between the 70-80 numbers and stay there for some time. Notice during those periods where RSI was above the overbought 70 number the index still traded higher and reaffirms the statement that there is nothing more bullish than an overbought one that remains so. 

"Amateurs want to be right. Professionals want to make money." Greenspan Tech Unrelenting: For all the calls stating technology may cool off, myself included, the sector is ignoring the narrative. While other groups are participating in a healthy manner, there is no question who is the leader thus far in 2023. So far on a WEEKLY basis, there have been eight gains of 3-4%, and not one week of distribution has occurred yet this year as volume trends remain very positive. The Nasdaq YTD is up 35%, compared to the Dow up 4, the S&P 500 by 17, and the Russell 2000 by 10%. This is a bull market that has been overlooking any bearish technicals, of course, this could change at any time, as dubious candles continue to mount. On 7/12 the Nasdaq recorded a doji, on 6/16 a bearish dark cloud cover, Friday a small shooting star CLOSING more than 100 handles off the intraday highs (the IGV registered a bearish gravestone doji Friday, and the SOXX a bearish engulfing candle). At some point, these will matter, especially as multiple ones flare up in such close succession, but the trend is undoubtedly higher. I still think we march to 16000, at some point in 2023, with some volatility, as the Nasdaq builds the right side of its WEEKLY cup base. If the DAX and CAC have already touched the late 2021 highs, why can't the Nasdaq this year?

Climbing The Wall Of Worry: The problem with the world is that the stupid are cocksure and the intelligent full of doubt (Bertrand Russell quote). Funny as one would not think the "clever" investors, as judged by recent AAII data, are full of uncertainty at all. For the fourth consecutive week bulls came in above the 40 number, and last week at 46.4% was a one-year bullish high. Notice the one-year low in bearishness did align with the market bottom near the end of Q3 '22 as well. Markets are dealing with higher interest rates too, as we spoke of in our Financial Note this week too. Of course, it has seasonality factors on its side as July is one of its strongest months CLOSING higher than where it began 4 of the last 5 years, by an average of 3.4%. On its WEEKLY chart to me, it still looks likely to travel toward the very round 4800 number that it touched in the last week of 2021 and first week of 2022. It is well north of the WEEKLY double-bottom pivot of 4325 whose pivot was created 11 months ago last August. The daily chart shows the importance of holding the 21-day EMA which it has done handsomely since late March, with the exception of a few times where it CLOSED below for a couple sessions before bullishly recapturing the swing traders moving average.

"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.

Mega Cap Tech Stalling: As of late, we have been making a habit of glancing at the top holdings in the QQQ, which seem to be tiring. This is not a bearish development at all, as long as the periphery plays start to pull their weight, and they have been doing that as we witness better overall participation. Below is the chart of Broadcom, just one of two semis to be in the top 10 holdings of the ETF, and it suggests it may be in need of a pullback. In the last month's period, it has produced 3 sets of bearish candlesticks. The bearish evening star pattern on 6/16 was a mild decline of just less than 2% but volume was powerful, double the daily average and the sixth strongest daily volume since the start of 2023. Friday ended Q2 with a rare doji candle, it's first in 2 months, a sign of concern as they are adept at signaling potential changes in the underlying trend. Additionally, on its WEEKLY chart, it met its measured move to the very round 900 number briefly on 5/30. At the expense of sounding like a broken record, it is firmly in an uptrend but pullbacks along the way are normal and healthy.