Wheat From Chaff

This week didn’t provide any clarity on market direction. In some portions, like tech, it certainly seemed like things were starting to breakdown, but the huge rally for no particular reason at all in the last hour of Friday really muddied the waters. Even so, below are some ETFs that I think still provide some clarity with respect to what lies ahead.

An otherwise perfect H&S pattern was sullied by Friday’s activity, but this could still work out. It really should stay beneath that price gap, which is where I’ve anchored the horizontal line, however.

Mexico’s multi-year downtrend is still cleanly intact.

Brazil is very close to an important trendline failure. You might want to set up a chart-based alert to monitor for this one.

The Nasdaq had its most powerful rally in weeks, but it was not enough to wreck the bearish reversal pattern in formation, which is about 80% done at this point. We need to break that lower horizontal to finish it.

I continue to focus heavily on the semiconductor sector, which has a similar setup to the Nasdaq with respect to its affirmation price and its failure point.

The biotech sector is almost done with its pattern. Just one medium-sized down day would do the trick.

Bank stocks are still sky-high relative to the trendlines.

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