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Gold Charts For Drink And Think:

Beware The Sleeping Giant: Sometimes you have to zoom out a bit to see what really is happening. The chart below could be an excellent example. This is a WEEKLY chart, and if one was to look at its daily chart, it trades pretty wide and loose hallmark bearish traits. But on the chart below one can see that AMZN has had a chance to breathe the last nine months as the WEEKLY 50 day SMA has caught up in PRICE. This is a line that it had not come into contact with in over one year. As always one can look at the situation with whichever bias they choose, but I am getting more constructive on the giant. If one looked at the glass half empty they would say the stock is lower 6 of the last 8 weeks, and still in correction mode down 11% from most recent all-time highs. Bullish bias would be the case that the bears have been unable to penetrate the name below the very round 3000 number. One can see the range between roughly 3000-3400 on a CLOSING basis, and something tells me this "runway" of 400 handles, will simply give the stock the takeoff toward the 4000 figure later in 2021.

Glass Half Empty: The best investors I have known, always are more worried about the potential downside. They manage risk appropriately, and let the gains take care of themselves. I would not say they are a melancholy bunch, but a chat with one of them over the weekend, and they may have come away a bit unimpressed with Fridays rally. Give credit to the Nasdaq Friday, CLOSED near highs for the session, with a wide 500 handle plus range. But looking at a more "gloomy" glass half empty view, the tech heavy benchmark still has some work to do. At its lowest intraday level Friday the Nasdaq was 1000 points below its 50 day SMA, and we like to see names/indexes keep in close proximity to the important line. On the chart below we can see there will be some friction Monday as bulls and bears square off at the very round 13000, number, the scene of a head and shoulders breakdown. Will it end up being a bear trap, or over the neat term with the breakdown achieve its measured move to the 12000 figure?

Tops Form Briskly: I am not making an outlandish prediction here, but the old saying that bottoms take time and tops form in unsettled fashion, is often accurate. Case in point with the chart of XRT below. Now PRICE action supersedes all else and one has to be very impressed with the vault of 25% between the 4 sessions of 1/25-28. Round number theory did come into play here with a strong rejection at the very round par number on 1/28, CLOSING 18% off intraday highs. There is probably some decent opportunity here, to the long side, with the ETF as it retested the bull flag breakout at 75 almost precisely Tuesday, and it is now 23% off most recent 52 week highs. Looking at the top holdings in the XRT, GME as of today was near the 20% threshold, and is the reason the ETF PRICE action has been skewed. So if one believes that that fiasco is in the rear view window, instead of through the windshield, there should be some good opportunities within. Top ten holding BOOT looks good, if it can get its foot in the door above the round 60 number, pun intended. 

Semis Sizzling: At first glance the 45% gain for the SMH in 2020, may look "pedestrian" (in line with software via the IGV YTD), but it has added 127.5% from the March lows. During the March depths, the ETF never CLOSED below the very round par number, even though the 3/17-18 sessions were each below 100 by at least 3% intraday. Most impressive recently may have been the UNCH finish for the week ending 11/13, after the prior week added nearly 13% (the week ending 11/13 was also accompanied by larger than average WEEKLY volume, meaning bears tried hard to push the space lower but were largely unsuccessful). The consolidation the in arena was active with three major purchases by AMD, ADI and MRVL. And each of those three is well higher from the announcement of the news. Look for this to carry into 2021. Stocks do a ton of due diligence before buying another name in the group, and to me thats about as bullish as you can get, when peers see big value in rivals.