Aloha from Kauai,
Well, that was a crazy week. The broader market went pretty deep on Monday, to say the least. We went so deep that may have satisfied price retracement and now we just have to eat up some time before ramping higher. It looks like SPY could follow my price projection so possibly a bit higher from here and then more downside before a reversal higher in September.
For those of you that want to trade this slide look for price to fail at top of blue line descending channel until reversal higher in September. For those of you that want to de-risk I would expect price to get near SPY 295 next week before reversing lower again and bottoming around SPY280.
SPDR’s S&P 500 Trust Series ETF (SPY) daily
Remember, these are just my opinions based on historical price action.
The InvescoQQQTrust Ser 1 (QQQ) has a similar look in that the price retracement last week may be near the low we will see this year and some chop/consolidation sideways may satisfy time to begin another expansion. See chart for notes.
InvescoQQQTrust Ser 1 (QQQ) daily
I also believe that what has been working will continue to work; domestic should outperform international, large cap should outperform mid and small cap, growth should outperform value and tech should outperform other sectors.
Here are a few charts that caught my eye this week…
PayPal Holdings Inc (PYPL) daily
Tesla Inc (TSLA) daily
Also,
Check out iShares S&P GSTI Software Index fund ETF (IGV). Software continues to outperform in the technology sector which continues to outperform the broader market. The chart I have attached compares the tech sector ETF (XLK) and the broader market (SPY) to this software ETF (IGV).
And,
Look at Sonos Inc (SONO) rip off its base. It sure wants to run in my opinion after crossing multiple resistance on Friday.
Sonos Inc (SONO) daily
For some giggles, check out the chart of CNBC’s Markets in Turmoil segments. Could be the new bullish indicator signal. Practically every time they prey on our fears the market reverses and goes higher. And they actually get paid for this nonsense. Disclaimer…I do like some of the people and I’m sure they mean well but .
CNBC’s Markets in Turmoil chart
Food for thought…diversification is good but underperforming sectors/instruments will put a drag on your overall returns.
And finally, if you don’t know, I swim at least a half mile everyday so that I have the strength and stamina to go surfing when the opportunity arises. I did surf this week at Kalapaki Beach but look at the photo I took where I swam on Friday. If you haven’t been, it’s in Hanalei; Tunnels beach, almost to the end of the road. Lots of movies filmed here. Just breath taking. It’s also where Bethany Hamilton lost her arm to a tiger shark. Good surf spot though.
Get your dry powder ready for Labor Dayish.
Don’t forget, these are just my opinions and please due your own due diligence. Charting helps me. I hope it helps you as well. In fact, without charting I would be lost.
Got to go now and catch the red eye home. Yuck.
Aloha,
Don