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Nasdaq Travails: Markets tend to bottom in a smooth, gradual, rounded fashion and top of volatile trade. The latter could be described as too what is going on currently with the Nasdaq. It is now finding difficulty at the very round 20000 number for the fourth time in just the last 6 weeks. Trade has been a bit wide and loose, hallmark bearish traits, and keep in mind the tech-heavy benchmark has doubled in PRICE since the consecutive doji candlesticks the first 2 weeks of 2023 (see my pinned tweet). Is fatigue setting in or at the very least does it need to continue to remain at this lofty altitude and trade sideways before a possible further advance? Remember I have stated that my belief was the Nasdaq would have trouble at 20000 due to the bearish MONTHLY shooting star candlestick in December, and we are now extended almost 30% above the 50 MONTH SMA. The stalling at the double bottom pivot on the daily chart below has to make one already cautious and the fact that next week starts a bevy of earnings, with AAPL META MSFT TSLA, and IBM all reporting adds to the concern. Mister Softee in my opinion has the best set-up after recently breaking above a double bottom pivot of 434.42. A move back toward that breakout and the gap fill from the 1/21 session should be bought by long-term shareholders.

Regime Change: Was it a coincidence that biotechs started to struggle mightily after the first full month in office in February 2021 a huge top for the group? Notice the cratering after the bearish shooting star that month, which started a more than 100-handle descent to the lows made in May 2022. The good sign is that it is holding north of the break ABOVE the bearish head and shoulders formation and we know from FALSE moves come fast ones in the opposite direction. It is still within the bull flag and trading in a taut range between the very round 90-100 numbers. Over the last year on an intramonth basis it traded above par 7 times, but only one month was able to CLOSE above 100, last August. Suffice to say, that is a big line in the sand going forward in 2025, and a break above carries a measured move to 135. The WEEKLY chart is a bit more ominous as it still trades below the nasty bearish engulfing candle the week ending 11/15 which slumped 12% in enormous volume. A bearish death cross is happening, but those occur after most of the technical damage has been done, and the last 3 weeks have defended the important very round 90 number. The daily chart of the XBI below shows CLOSES above 90 are imperative, as just a few below that number have occurred but the worst being 12/19 by 17 cents. Good risk/reward here for the group.

Energy Sector Underappreciated? Most energy investors realize the recent past has been either feast or famine. It is easily seen here on the annual S&P sector performance chart dating back to 2009. Notice 2024, is following a predictable trend as being either at the top or more likely the bottom since 2014. The years of 2106, 2021, and 2022 have been standouts, albeit rare ones. Is 2025 likely to be another one dwelling in the cellar or will it be a creme of the crop scenario? Below we looked at the MONTHLY chart of the XOP, not the XLE, and firstly it demonstrates my belief in never purchasing falling knives until a bullish catalyst develops. That would have kept one out, at least long, from October 2018 until April 2020 with the piercing line candle. The energy space has been "dead money" in 2023 and 2024 and could be interpreted as opportunity cost too, but if one wants to paint it in a sanguine fashion they could declare it simply has been digested the 55 and 66% gains in 2021 and 2022. The bull flag in place would need to break above 160 to be considered a legitimate breakout, so there is still plenty to do, but this feels like a sleeping giant about to be woken up. Those stating the first Trump term was unkind to the space would be correct as it fell 7 straight months until it touched par then rocketed 60% before a precipitous drop. There will certainly be volatility in Trump's second term. That will be perceived as delightful or dreadful depending upon how well you take advantage of the opportunities.

Will the Real Semis Please Stand Up:  There is some big bifurcation going on in the chip space. Does it make sense to play a barbell approach with leaders and laggards? We have witnessed some nice gap up after earnings for AVGO and MRVL for example, but others like AMD and NVDA are falling behind. The daily chart of the SMH shows overall the group seems to have a slight breeze behind its back. Will a stronger gale start to occur? It is right in the area of a double bottom with handle trigger and the SMH is holding up a bit better even with its huge NVDA weighting (21% compared to 9% in the SOXX). AVGO in the SMH makes up 10%, less than half that of the SOXX, and MRVL is not even a top ten component (MRVL carries a measured move to 144 from the bull flag breakout above 112). There still is a lot of dead weight within with QCOM going for a 7th consecutive MONTHLY loss (notice how the prior cup found nice support at the very round par number between 2022-23). NXPI is sputtering also going for a 7th straight MONTHLY decline and is now retesting a cup with handle breakout pivot of 218.87. At the expense of sounding like a broken record, MCHP is looking at its 7th MONTHLY loss in a row, after a rejection at the very round par number in May and a September doji candle could not help it (now more than 40% off its annual peak). Again paint the picture with either bias you want. Bulls will say SMH holding up despite all the roadkill. Time will tell.