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Round Number Rescue: For long time readers that know my affinity with round number theory it was a good example with the bounce off the very round 10000 number on Thursday for the Nasdaq (from the peak near 16000 almost one year ago thats a nearly 40% haircut). Could say the same thing about the S&P 500 at 3500. LRCX off 300. You get the picture. The leadership in mega cap tech has been nonexistent since August, but for the most part for longer than that. AAPL, the most valubale tech company on the planet, itself has a larger market cap than the entire energy sector. GOOGL now looks as if a bear flag formation has been carved out with resistance at the very round par number and a break below 95 would carry a measured move lower toward 70, which would not even touch the March 2020 lows. AMZN which flirted with 100 this spring-summer looks like another trip there is likely and it may not hold this time around. META has now lost two-thirds of its value, not a typo, since its peak last August. NVDA has sliced off roughly the same, from just last November. TSLA which REPORTS Wednesday on its WEEKLY chart has a rough neckline in a head and shoulders pattern in a base nearly 2 years long. Tech is disproportionately hurt by rising rates and the chart of the Nasdaq below better hold that 10000 figure it touched Thursday.

Something Feels Different: As many attempts to decipher when the bottom may be in, a fruitless endeavor, PRICE action is clearly telling one that is not the case. Things can change pretty quickly but anyone fighting the trend this year has realized that bottom fishing is the most expensive sport. I was always taught that tops form in a very volatile manner and bottoms in the opposite tone with very smooth action, hardly what we are seeing today. Technology which is usually an investor's focus has been heavy this year and the chart below brings to mind the old adage that there "is no such thing as a triple bottom." And remember yields give a certain rivalry to equities and with the 2-year now yielding well more than 4% it is presenting a problem, especially for technology (greenback is another issue) which abhors rising rates. This week, a great example of this was the reaction in AMD which guided down and was torpedoed 14% on Friday. In the not-to-distant past, MU was able to shrug off doing the same. There is no reason to be a hero in this market on the long side. Preserving capital and cash is paramount here.

Semis Ready To Stretch Their Legs? The seasonality chart below of the SMH shows a very positive trend coming into play with a 5-month stretch that sees the ETF CLOSE higher than it started the month (notice how September was true to form with an average loss of 3.6% dating back to 2018). Obviously, November is the outlier up every month for the last 4 years and by an average of nearly 10%. There have been some green shoots recently too with MU acting well AFTER a nasty earnings reaction and INTC's Mobileye filing for an IPO. The SMH is 37% from its peak made last November, but this week is up 8% already heading into Wednesday. It is touching up here right at the very round 200 number but look for strength from top holding TSM which so far has the look of the bullish WEEKLY piercing line candle that it last recorded the week ending 7/8 that led to a 6-week winning streak. QCOM and AMD completed classic bullish morning star patterns Monday, and KLAC is breaking ABOVE a bear flag pattern. So far, so good.

MONTHLY Nasdaq Chart Revisit: We frequently like to say PRICE is omnipotent. You can use all the indicators you want but at the end of the day that is how we are judged/paid and all of the "signals" we like to use react to PRICE too. We have heard the breadth thrusts, the percentage of stocks above their 200-day SMA falling to single digits, no bear markets which recaptured 50% of the down move went on to test the lows, etc plenty. But PRICE overcame those all, to the downside. I was bullish following the July bullish engulfing candle which came into contact with the rising 50-day SMA, a rare occurrence as seen on the chart below (just the third time in the last decade) but that sanguine outlook must be reined in now as that candle was negated in September. Sure positive seasonality is kicking in with the Stock Trader's Almanac stating that October "turned the tide in 12 post-WWII bear markets: 1946, 1957, 1960, 1962, 1966, 1974, 1987, 1990, 1998, 2001, 2002, and 2011." (the Nasdaq tends to be firm in mid-term election years too). But unless this CLOSE below the 50-day SMA this month turns out to be a bear trap market participants should err on the side of caution. At the very least the "V-shaped" bottoms we became accustomed to in 2018 and 2020 are in the rearview mirror.

Bears Gaining Steam: Bear markets are ruthless. There is not a lot that bulls can hang their hat on these days. Interest rates and the dollar continue to skyrocket. We know that last week was one of the toughest weeks of the year, and overall PRICE action has been lousy. Three of 5 days last week witnessed all 11 of the major S&P sector falling, and on a WEEKLY basis, every sector fell with defensive staples, utilities, and healthcare acting "best" but still falling between 2-3%. Looking for a silver lining that has been a dangerous endeavor, the semis, like the Nasdaq recorded a mild reversal Friday with bullish hammers, for the SMH at a key level. Interesting were they did not take out the summer lows (SMH did by less than .50 Friday but CLOSED well above) as software did. This is a very minor green shoot but one we could look back on if this market can find its footing going into a strong seasonal mid-term election period starting with Q4. Sentiment is lousy too. But respect the power of the bear and if those lows on the semis are taken out on a CLOSING basis look out below.