Well, our old friend the Iran war is still a thing. The market was wheezing (and losing its Semiconductor leadership) and it is July, a month that often sees the ‘summer correction’ begin.
I don’t want to devolve into play-by-play caller, having made somewhat dire analysis in NFTRH 922 and then moderating that a bit in Monday’s NFTRH+ update. Outside of our analysis tools, you don’t need me mentally whipsawing you as you see the same things (inflammatory news items) that I see.
Another update on Monday illustrated the negative divergence in the Semiconductor ETF (SMH), and that appears to be resolving into a rollover. Tech (QQQ) looks bad too. I raised cash yesterday per the in-day notes, and will likely do more of that. I may also short a thing or two. But mainly it’s cash, baby.
For now I am sticking with the view that the correction will be normal, not the eventual disaster that I think awaits on the horizon. Keeping in mind that this morning’s pre-market declines are triggered by a news item, and thus probably dependent on that news continuing to be bad (we are again in the crosshairs of Trump’s jawbone, good or bad), if the breakdowns prove sustainable and get worse, we’ll be on our way to a real correction. We’ll certainly chart it for downside targeting.
It goes without saying, although I said it again in yesterday’s notes, gold stocks are not unique. While they may yet bounce/rally after this pullback (still within the falling wedge), I was wrong to think the bounce was already on, obviously.
More to come from your friendly play-by-play caller. Right now, it’s ‘STEE-RIKE 2!’ for the stock market and ‘ball 3’ for the correction view.
