Market Update for Wednesday, May 10th, 2023

On Monday, I joked that it’s Groundhog Day because we’re still stuck in the range (that refers to a famous film for members not well versed in the American film industry).

We’ve got the rising wedge, we’re still being sucked to the August through February trend line, the Great Magnet:


I like that we made an attempt to drop from the wedge. That’s a second violation. I also like

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As always, we haven’t actually dropped the range, and until we do, it will always be possible for us to challenge the highs again.

A couple other things I like:

  1. I like that BPSPX fell again today. Breadth continues to deteriorate. If this is a distribution, that’s what you’d like to see.
  2. I also like how the Dow Jone Industrials Average reacted at this trend line on the open:


We opened right at it and sold hard. It may not feel like it, but the Dow has been steadily making lower highs for 5 months straight. We had that huge rally last fall and after all this consolidating, it’s not been able to go any higher than that.

Two more comments, one on crypto, one on some position changes:

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So, that’s what I’m thinking. We get closer every day to something. Reasonable chance that something is for the bears. We have PPI in the morning, and it, too, can be a mover. I have no way to predict it reliably. But, there’s a setup here and if the markets react negatively, it will make a lot of sense.

I hope everyone has a wonderful evening, and I hope we get out of this structure sooner rather than later.

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