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Size Matters: As everyone looks to the direction of the greenback, interest rates, and crypto for signs of what the market may do next, could it be as simple as what the small caps do? Keep in mind this space tends to lead and remember how one of the most telegraphed breakouts in some time almost 1 year ago fell apart in rapid fashion. On the chart below one could see the very clean breakout above a flat base with the IWM jumping 6% the week ending 11/5/20. The saying goes "if it's obvious it's obviously WRONG" comes into play here. The ETF subsequently went on a 4-week losing streak falling by a combined 12%. It "led" in this situation too as the S&P 500 and Nasdaq did not start their descents until 3 weeks later (Dow fell roughly in line the same as the IWM). The point I am trying to make here is the IWM has been demonstrating some relative strength as the only of the 4 aforementioned benchmarks NOT to undercut their June lows. If they can break this string of lower highs that began at 220 to start 2022, could that be a sign that a real bottom is in, as they potentially "lead" to the upside here? A decisive CLOSING break above 190 next week could be the catalyst.

"If You Can Meet With Triumph And Disaster And Treat Those Two Impostors Just The Same" -Rudyard Kipling Monthly Nasdaq Confusion: That eloquent quote above hangs just above the entrance to the hallowed grounds at the All England Club at Wimbledon. It is meant to keep emotions in check, no matter what the outcome, on the tennis court at one of the most famous sporting venues under enormous pressure. Certainly, it could be applied to market participants who have tried to navigate this very difficult landscape recently. Huge highs and lows have occurred and in my opinion, it is not the healthiest of actions. Thursday the Nasdaq jumped 7.3% in very firm volume and give credit for Friday up another 2%. I was always taught that bottoms formed in a smooth, gradual fashion, not this wild volatile nature we are presently seeing. Perhaps it will end up being as simple as round number theory with the MONTHLY gravestone doji candle in November 2021 at 16000 as the top, and the spinning top candle at 10000 in October at the low. There is still 2 1/2 weeks left this month and a CLOSE above 11000 has to be viewed through a bullish lens. Call me skeptical but PRICE as always will let us know.

"Mixed emotions, buddy. Like Larry Wildman going off a cliff in my new Maserati." Gordon Gekko Clashing Signals: Unless one has been hiding underneath a rock there have been some glaring bifurcations among the major indexes. The obvious laggard has been technology, with the Nasdaq lower by 6% over the last one-month period. Easily the best of the bunch has been the old, stodgy Dow which has gained 7% (over the same time period the Russell 2000 is higher by 1% and the S&P 500 is UNCH). The Nasdaq is off 7 of the last 11 weeks, with three WEEKLY declines of 5% or more. In all this contrast even with the Dow's strength (although it still can not catapult above its 200-day SMA) investors must have mixed feelings. Typically the big, mature defensive names are the last to crack as market participants cling to what they perceive as "safety". Are these stocks ready to join the others in their misery? It has certainly helped there are just 6 tech stocks in the Dow currently (one is CRM and in August 2020 Exxon was removed from the Dow and Salesforce was added to the index. Total Returns since, Exxon +214%, Salesforce: -41% thanks Will). Very few of the 30 names have good long-term setups, perhaps some tactically so in my opinion cash overall is still king with some good trading opportunities.

Golden Arches: The consumer discretionary space continues to be a cumbersome one. On a YTD basis, it is now lower by 32% and just the 10th best of the 11 major S&P sectors. And inside the fund's top 10 holdings there are just two names above both their 50 and 200-day SMAs and they happen to be casual diners. SBUX never came close to retesting its May-June lows, a very good sign, and is quietly higher in 14 of the last 20 weeks (4 of the 6 decliners fell less than 2%). Friday it broke above a 90.80 double bottom pivot. Below is the chart of best-in-breed MCD. It is just 1% off most recent all-time highs and this week displayed good relative strength UNCH as the XLY fell more than 5%, and this is after the prior week jumped 7.8%, its best WEEKLY gain since April 2020. It is funny how things tend to come full circle as the name it spun off in CMG in 2006 was the general in the diners and that is now struggling since nearly touching the very round 2000 number in September 2021. Respect the fact that MCD is offering an add-on buy point on the way UP, exactly what leaders do and it is doing so in a weak market climate. "I'm loving it".

"The Mass Of Men Live Lives Of Quiet Desperation"- Thoreau Mega-Cap Distinction: The above quote could be applied to mega-cap technology bears this past week. Earnings reactions for AMZN META and GOOGL were all ill-received. Now if one peered into the biotech space one would have witnessed quite the opposite. AMGN exploded past resistance on its WEEKLY chart this week taking out a bullish inverse head and shoulders pattern whose trough found support at the very round 200 number in Q4 '21. It was the stock's second 9% gain in the last 3 weeks and look for a move toward 320 into Q1 '23 on the measured move. GILD jumped 17% last week on nearly double the average WEEKLY volume. REGN is bull flagging with the last 7 weeks digesting the 25% WEEKLY gain ending 9/9. Will the XBI follow the IBB's lead? The ratio chart below shows the relative outperformance for the mega-cap names but on an absolute basis, it does not mean the XBI should be avoided. The fund has broken ABOVE a bearish head and shoulders and from FALSE moves tend to come fast ones in the opposite direction. Leading names include NBIX SRPT and HALO.