May 29 2024 (Wed)

Market Drivers

• NVDA going parabolic
• Stronger than expected Consumer Confidence
• Weak demand in treasuries and the rising yields
• OPEC+ could extend voluntary output cuts of about 2.2 m barrels into the Q3
• Increasing geopolitical risks in the Middle East

Market Breadth

• AD Line: (-) Both the 10 and 20 MA resumed its downtrend with the 10 MA crossing below the midpoint.
• Up/Down Volume: (-) Both the 10 and 20 MA resumed its downtrend with the 10 MA crossing below the mid point.
• Put/Call: (=) The rising 10 MA could cross above the flat 20 MA.
• New Hi 1/3/12M: (-) All crossed below the mid point showing bearish divergence.
• New Hi/Lo: (+) Bounced off the mid point with bearish divergence
• S&P 500 above 50/200 MA: (-) The 50 crossed below the midpoint and the 200 is falling with both showing bearish divergence.
• VIX: Rising
• Conclusion: In spite of the apparent uptrend, the market shows lots bearish divergence happening under the hood. It appears that the market is supported by a few mega caps, especially by NVDA. The market might be in Wyckoff’s distribution phases with the recent high representing UT. The ES shows losing momentum in the hourly chart.

Sectors

• SMH: The leader
• TAN: Bottoming
• URA: Breaking out the channel
• PBW: Reverse head and shoulder (?)
• DBC: Cup and handle
• XLF: Potential short (FAZ)
• USO: Double bottom

Assets

• NG: Neutral. Gapped up. Wait for a pull back to the rising 10/20 MA.
• BTC: Bullish. Testing the rising 10/20/50 MA. If it breaks above the resistance, go long.
• HG: Neutral. In consolidation.
• ES: Slightly bearish. If it breaks below last Thursday’s low, it could test the rising 50 MA.
• GC: Neutral. In consolidation.
• DXY: Slightly bullish. The falling 10/20 MA work as resistance so far. However, it is gaining upward momentum.
• CL: Bullish. Broke the 80 resistance. It could pull back during the intraday, but upward momentum is rising with catalysts.
• 10Y: Bullish. All MAs are coiling upwards. It could test resistance at 4.7.