Weekend Report for Monday, February 18

Bottom Line:

More all-time highs. The trend is up.

If that sounds simplistic and trite, well that would be half correct. It isn’t intended to be trite, but it is simplistic. It is also totally, objectively accurate.

This is an easy market (the US stock market) to look at and say this can’t/shouldn’t be happening because of the macro backdrop or some second or third derivative technical indicator. This, however, is not new. You will hear and read the same narratives in EVERY extended trend – both up and down. 

If you will step back from narratives for a bit the market is actually quite an easy “read” at the moment. All four primary trading US indices are all making higher highs and lows in ALL timeframes.

Let’s spend some time just analyzing the price action.

PDF: Weekend Report_2024_02_18
VIDEO

 

SPX

Upper KRA: 5040
Lower KRA: 4920

The trend is obvious. It is more likely that a relatively wide trade ranging develops than an inverted V top form.  

NDX

Upper KRA: 18051
Lower KRAs: 17478

Same comments for the SPX apply to the NDX.

RUT

Upper KRAs: 2072
Lower KRA: 1950

The RUT has been odd man out in the 2023 ramp so far, but it has been showing signs of catching up. A close above 2072 is bullish.

DOW

Upper KRA: 38938
Lower KRAs: 38042

SPX Profile 

Below are comments from three weeks ago. Nothing has changed.

From the weekly perspective there has been one minor pocket of Balance since the October 27 low. It appears another distribution (range) began at the January lows in the indices. The relative lack of Balance, and the depth of retracement in that Balance is unusual and likely to eventually result in a top of larger degree than we have seen since that October low. Where that top may occur is a complete unknown (see above).

Potential Paths of Development

Internals

NYSE internal data has not been helpful. It is never as useful in bull trends than in bear trends, and that is especially true in the present with only 5-7 stocks completely controlling the direction of the NDX, SPX and DOW.           

                                                                                                                                                                                                                                                                                                                                                                                                                                 

US 10-yr Notes

Trend is down. Approaching a downside KRA.

US Dollar

The Dollar has been in an extraordinary whippy day-to-day chopfest, but so far with a clear upside bias. 

Gold

Stuck between critical levels.

Crude

A close above 79.65 is bullish.