QuiCQ 10/09/2024
“The markets take the stairs up and the elevator down.”
— Wall Street Adage
Monday brought a badly needed bounce (dead cat?) to stock markets. Whilst the rally was not strong enough to make back all of Friday’s losses (read today’s QOTD again), there were many encouraging attributes to it: all eleven economic sectors closed in the green, the up-to-down stocks ratio was 5:1, volume was nearly equal to Friday’s and 47 stocks hit a new 52-week high versus just 5 trading at a new 52-week low. This continues to be a market of rotation, not a market topping.
Yields on both sides of the Atlantic softened somewhat again, with the Tens trading at 3.70% and the Bund dropping below 2.17%.
Gold continues to trade around the $2,500-handle whilst oil is rebounding from its key support level we highlighted in yesterday’s Quotedian.
Tight ranged Asian equity markets, which is likely also to be the tone for our and the US sessions, as investors await tomorrows CPI number due at 14:30 CET.
It seems that everybody and his mother are looking at that omnious shoulder-head-shoulder (SHS) pattern on the Philadelphia Semiconductor index (SOX). SHS-patterns are like the first thing you learn at technical analysis Kindergarten, as there are easy to see/define (albeit, armchair TAs nowadays forget to take volume into consideration).
In any case, a SHS is a potential reversal pattern and should be watched for two reasons:
For a reversal (doh) as the neckline breaks, and
For a failure of the pattern, as the uptrend resumes.
As someone once told me: “There is nothing more bullish than a failed reversal pattern”
Stay tuned …
