It’s time again for the big picture review, which for me anyway, has a way of grounding and taking away the daily noise of an oh so noisy backdrop. Donald Trump is busy enacting his promises and the markets are obviously gaining a new surge of confidence.
I’ve had 2410 on the S&P 500 forever and a day, but only this week does the drive toward it feel like it is back on track. The monthly chart however, never stopped advising its measurement.
Nor did the weekly…
The Dow is perched below the hoopla-in-waiting of 20,000. But the measurement is actually 21,000.
Nasdaq 100 is flying in blue sky and has been taking up momentum of late.
Semiconductor index has sliced through our upper target as Goldman loves itself some LRCX and the financial services industry touts the thing we loved back in early 2016. There are better plays, in my opinion. Wall Street is touting the Semis too aggressively now.
Small Caps hit the ridiculous target we contemplated years ago and now has another ridiculous target. Ridiculous, isn’t it? Maybe, maybe not.
Crude Oil is self-explanatory; hold current levels, measure to 75. That’s a really cute pattern.
Copper broke a downtrend channel but before you go into a whole hog ‘resources’ and global growth frenzy, let’s just abide by that thick copper roof otherwise known as long-term resistance at 3 bucks a lb.
The bottom line is that I am short nothing, and long several things. That is because in US stocks the trends are as they have been for years on the big picture (up), and turned up in 2016 on shorter-term views (ref. 2nd chart, the S&P 500 weekly).
As for commodity headliners oil and copper, they have their targets and under the new world order, there seems to be scope for a robust trade in the ‘resources’ sectors (beyond oil and copper, obviously).
But there is clear resistance for commodities up above and the stock market is very possibly entering a manic mode. Now, the power of all those afraid they are missing out could pop the lid on this thing, rendering extreme over-bullish sentiment analysis dormant for a period of time. I am hoping to book profits all around amid signals that see many items at resistance, others at upside targets and sentiment simply off the charts over-bullish.
All subject to refinement or revision of course, since nobody’s got a crystal ball for this type of environment (radical change). But one thing is for sure, the monthly views of the US indexes never – not even through the big disturbances of 2015 into 2016 – lost long-term support and this sprung a renewed big picture uptrend.
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