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In many instances, the activities of the past few years of the major indexes can be described with a couple of simple facts:

1. They have broken important ascending trendlines;
2. Their recent massive rally has achieved nothing except to hammer out a “lower high“.

Here are four examples of this, with the dashed red line anchored to the peak last week of the index (as stated, lower than the lifetime high from months earlier):

The Dow Industrials had broken a major trendline during the early April swoon, and it is teetering at the precipice of that same line right now.

The oil index has been vexing, to put it mildly. Some weeks ago, it had the markings of a fantastic reversal top, but the Israeli/Iranian conflict has caused so much fervor in the energy markets that it has pretty much wrecked the pattern. I’ve got a handful of individual energy shorts, but I’m avoiding the likes of XLE and XOP, which were my instruments of choice earlier.

The gold sector index, however, is squeaky-clean. This extremely long-term ascending pattern plainly shows major resistance was hit within the past week, and although it’s bound to have plenty of bumps along the way, it is possible that this high could stick for many months, if not years, to come.

The Dow 20 transports is a beautiful failure. The cyan area marks the bullish base from which it emerged, but prices crumbled right back into the pattern and wrecked it. For months now, we’ve been hammering out a steady series of lower lows and lower highs.

The semiconductor index is in a very interesting spot right now. On the one hand, it is mashed right up against a major resistance trendline (and also has hammered out nothing more than another “lower high“), and thus it seems prone to a hard fall here.

On the other hand, prices have been strong enough to modestly pierce the trendline. There has been zero follow-through, however, so I do not think this counts as any kind of breakout.

The Russell, which remains most important to me due to my September $220 IWM position, is still fighting it out between its bearish setup (pink) and bullish setup (green). The more it sinks back into that green zone, the more comfortable I am declaring this a failed breakout. The ideal scenario would be for it to get pushed beneath the Fibonacci and to become range-bound as it was in 2022.

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