The stock indexes are in an exceptionally interesting configuration: almost without exception, every major cash index has hammered out a well-formed diamond top reversal pattern. This examination will be repetitious in that respect, but let’s press on.
First up is the NASDAQ Composite. I’ve lazily drawn a rectangle to represent the diamond, but trust me, it’s there.
The odd man out is the Dow Industrials. In spite of a massive smack-down in tech stocks on Thursday, the Dow didn’t just whistle past the graveyard, it practically burst into classic Broadway tunes. It is at nearly 53,000 and closed at a record high.
The NASDAQ 100 is another diamond, and it’s a beauty.
Same goes for the S&P 100.
The Rusell 2000 cut under its channel months ago, and it has spent weeks clinging desperately to the lower trendline of the channel. The oscillations around the trendline and getting tighter by the day.
The crucial semiconductor index has cracked into its channel once more, having exceeded it for several weeks recently.
Lastly, the all-important S&P 500 has similarly produced a diamond. Keep in mind, if prices push above the diamond, it’s just more bad news for the bears (who have had that style of news for eighteen years now) since it will be a continuation pattern instead of a reversal.
