Market review 24.06.09

Bullish amidst high bifurcation and volatility

Hello everyone,

Bifurcation is something we’ve become used to seeing in the past couple of years, and this week was no different:

Tech, crypto, and bonds did well, while energy did not. This part is consistent with the analysis in my blog posts and is the Intermarket trend that I remain focused on.

What was less clear was that, despite lower rates, we saw notable weakness in gold, homebuilders, banks, and small caps.

Today, I’ll review many of these areas separately, but first, let’s look at the broad market.

Global Equities

The weekly chart of VT (Total World Stock ETF) has been an excellent trend-following guide. Late last year, VT made a 3-year breakout to new highs. We saw a pullback in April, followed by new highs again. Currently, we’re sitting on a short-term support level.

VEU (World ex-USA ETF) is sitting on 3-year support. It’s important to see markets show strength in the coming weeks.

Zooming out further, the quarterly chart of Japan’s Nikkei is sitting on 34-year support! Again, we need to see strength in the remainder of this month.

This week's elections in Mexico and India resulted in enormous daily swings in the EWW and INDA ETFs. Mexico and the weakness in commodities dragged down the broader Latin American region.

Big Tech

The mighty QQQ made new ATHs on Friday.

Weekly charts are setting up for a breakout in many mega-cap tech stocks such as AAPL, GOOG, MSFT, and ORCL (link).

Zooming out further with monthly charts shows that many tech stocks are coming out of multi-year bases (link). This, to me, says the bull market has plenty of room to run (in terms of both price and time).

Crypto

Like the AMZN monthly chart above, BTC is lifting after retesting its 4-year breakout level.

Among the universe of non-leveraged ETFs, crypto miners have been the top performers over the past year. It should be no surprise that they again stole the show this week, with WGMI up 15%. WGMI has formed a 6-month base and is setting up for a potentially explosive breakout over the summer:

How could Bitcoin miners thrive when their block reward (mining revenue) was cut in half recently?