Our Top 10 report was just published. In this weekly note, we highlight 10 of the most important charts or themes we're currently seeing in asset classes around the world.
From Failed Moves Come Fast Moves
Markets have been unequivocally choppy. Breakouts are failing, new highs are dwindling, and it’s becoming more challenging to find trending opportunities. Last week, we discussed how Semiconductors failed to breakout, and asked whether its peer industries would follow suit. Well, we have our answer now… One of the strongest industry groups in the last two months, Internet, just printed a failed breakout at its February highs. Software looks frighteningly similar.
Digging into some of the components, Amazon, the largest weighting of the group, is in the process of retesting its September 2020 highs of 3550. And to compare the industry group to one of its peers, Semiconductors have also put in a failed breakout.
When even the leaders of the market can’t catch a sustained bid and hold new highs, we’re usually in an environment where stocks in general are struggling. And they are. If we’re below 243 the risk is in favor of the bears and we could bet on a quick move back toward the year-to-date pivot lows of 208. Although, we have to be open to the fact bulls could quickly repair this damage. If we’re above those February highs we can NOT be short.
