#$SOX make or break time?

Great study from @leutholdgroup.bsky.social. Worth noting that 5 out of 7 recent cases featured sharp drawdowns from July signal date. Upshot? Breadth is constructive but don’t be surprised by choppy sailing ahead. 1/2

Mid-week humor

CPI on deck. Core expectation is now 2.8%.

Comment: I'm aware that A-D lines imply bullish rotation and that April's price thrust suggests a fresh advance. SPX is stretched versus its long-term trend channel, however, making risk/reward far from ideal. Guessing that SPX will progress toward 8k in a choppy sloppy manner.

CPI on deck tomorrow morning, followed by Warsh congressional testimony. Key levels are 3.8% headline and 2.9% core.

Charts aren’t necessarily predictive, but it’s hard to gauge supply and demand without them. Resolution of UST10Y multi-year sideways will provide the next directional clue.

Phil D. Gapp has been particularly busy in QQQ land. Tuesday’s downside gap was filled this morning while generating a fresh upside gap and a small island bottom. Gaps within congestion are less meaningful than other varieties, IMO, but still worth noting.

Thirties on deck, 1:00 p.m. ET.

ITB is on my radar. Don’t neglect the housing sector given its outsized role in the market economy.

Old saying: “The market never discounts the same thing twice.” Renewed tensions are testing this adage.

Most important chart on planet? H/t @TechCharts

Mid-week humor

9th time the charm? #$TYX

Can small-cap withstand hypothetical mean-reversion in semiconductor space? It’s possible, but wasn’t the case immediately following the March 2000 top. The initial reaction was broad selling, with SML beating SPX only after breaching its own 40-week trend.

Post-1998 analog suggests choppy sailing ahead. At some point the pattern will fail, as all analogs eventually do.

Gold's multi-month drawdown resembles the corrective structure of 2006, suggesting a potentially constructive setup into favorable July seasonals.

#$USD jumps back into the creek.

Contrarian clarion? 🤔

Value trap or healthy rotation? #$MU

Mid-week humor

The NYSE Advance-Decline Line has typically led SPX to new highs. Different this time?

"Don’t just do something, stand there." –John Bogle

UST multi-year triangulation, basis IEF. #WatchingPaintDry

Today’s SOX melt-up loosely resembles turn-of-century behavior, promoting risk management despite buoyant earnings.

Earnings momentum is historically extended, emphasizing the importance of risk management going forward. Good contrarian thinking from the invaluable @jimwpaulsen.bsky.social.

Biotech on the loose. #$XBI

#$MU on deck.

Largest S&P 500 sector since 1972. H/t @_rob_anderson

Mid-week humor

Only Fartcoin can save me now. 🤪

Split markets aren't always terminal, but do warrant caution, as illustrated by Norman Fosback's high-low logic.

Buck unstuck?

That iShares #$EEM appears healthier than Vanguard #$VWO is a matter of index construction, as Vanguard excludes South Korea from emerging market status. Thanks for telling me now?

Bonds remain technically precarious following Fed “regime change.” H/t @TechCharts

Gold 2006 analog. Bottoming process underway?

Note to self. Memory bellwether, Micron Technology reports Wednesday post-market.

Trends continue until they don’t. Semiconductors are historically stretched, but still printing higher highs in SPX, R2K, and dollar terms. Thank you, Captain Obvious?

Cyclical tops are usually preceded by a “warning crack” not dissimilar to Q1 2026. Counting forward puts the next cyclical top near September 2026, if the pattern holds. Big if, of course.

Note to self. AVWAPs from blowoff top (orange) and invasion top (blue) may offer next-level resistance, if GLD can hurdle 400.

Guessing that Warsh talks tough to dispel notions of complicity, while covering all bases, of course.

Mid-week humor

Patiently awaiting space-related SPAC touting "a company for carrying out an undertaking of great advantage, but nobody to know what it is."

Commodities deflected, basis energy-heavy GSCI index (Chart 1). Mixed message basis GSCI sub-sectors (Chart 2).

China’s secular bear market is a conspicuous feature of today’s Global Macro landscape. #WatchingPaintDry

#$DXY long-term perspective. Chuck the buck?

Comment: No analog is predictive, but 2006 presents a bullish scenario, or at least rules out a bearish imperative. Recent over-extension is not necessarily a show stopper.

Gold annotated. 🤔

Worth noting that today’s NYSE A-D line doesn’t fit the post-LTCM mold. Never a layup, is it?

Oh, forget it...