I just want to make a quick observation about the long-term structure on France’s $CAC40 (the main index there).
It’s structures such as this that prevent me from getting too bearish (at least yet). It’s an ascending triangle of ginormous proportions. Rally out of the COVID low produced a breakout. All it’s doing right now is a harmless retest.
This, combined with my remarks on other world indices leads me to believe that we’re simply enduring a major correction in US tech. Is that done? I hope so.
But without seeing more weakness in these other indices far removed from US tech, I don’t have enough evidence yet to expect a major downturn. And in fact, to the contrary, a structure such as this—should it find support here—would be remarkable because this index has never fully taken out its dot-com high, and support here would imply that it will soon.
If I start seeing structures like this fail, I will certainly listen. But so long as structures like this haven’t failed, it’s also possible that we’re on the cusp of a huge, multi-year run from here. What the catalyst will be given the dreary news flow right now, I do not know.
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