Now that we’ve entered the second half of 2017, I wanted to take a look back at the quarter that just closed. On the whole, it was just another victory for the bulls, who have enjoyed over eight years of uninterrupted central-banking goodness. Indeed, looking at this chart of the Nasdaq Composite, it looks like totally smooth sailing ahead…….

I would point out, however, that if you look closer, things are a lot rougher around the edges than you might think. The big red bar (which, ironically, almost marked the lifetime high) began the “tech wreck”, and since then, we can at least agree that the unrestrained momentum has been taken out of tech stocks. Personally, I have my entire ETF portfolio in one position – the QID (ultrashort on the NASDAQ 100).

The Russell 2000 small caps have also been higher a smoother and smoother ride higher, but we’re smashed right up against resistance, and present prices seem to favor the bears.

Once again, let’s take a closer look – – as you can see, ever since December, there have been four assaults on that resistance line, and each of them have failed (although, to the credit of the bulls, the “scallops” have been simply moving higher and higher each time).

I would say there were about four phases to Q2 equity action, expressed below by the Dow Industrials. First things were quiet moribund, and then there was a jolt higher thanks to the supposition that Trump was going to slash taxes and give corporations all kinds of sweet, sweet gravy. The bluster lost its credibility, however, so that really disappeared. Following this, however, was a firm, steady rally, terminated in the past couple of weeks by a retreat from its daily habit of making lifetime highs. In sum, everything went up, but it got pretty ragged near the end.

Looking overseas, we can see the fissures showing up too. France, which had exploded above a long-term resistance trendline (thanks to recent election activity) has completely given up those gains, and we may have a failed bullish breakout on our hands.

Likewise, in Germany, the breakout of the DAX has faltered.

At the peak of Q2 equity prices, we got about 1% away from the Fibonacci extension goal I’ve shown so many times. If we don’t get some kind of meaningful break in Q3 (lasting more than 2 days), I think I’m going to have to agree with Yellen…that she’s mastered the markets, and there won’t be any more financial crises in our lifetimes.