 Hi everyone, this is Mike Kramer of Mach Capital and we're just gonna take a look at the markets today and see what we can't figure out So the last time we spoke we were focusing in on this rising wedge pattern And that indeed has played out to some degree. Although we haven't gotten the complete Reversal we have gotten about half of it to this point And so that leaves us with a question of how much further can the S&P decline or we're looking at some further upside here And at least when you look at the immediate chart you can get a sense that There is a little bit of an uptrend that's formed over the short term here The last couple of days since the bottom of the rising wedge You can see we came down and tested this level once and this level now and that's formed our uptrend There is however a very big downtrend that's been in place now since the February 2nd high This red line was at this was that 80-day timing pattern that I had pointed out back in the middle of February Which marked the turning point in the index you can see that the 80-day cycle has Marked bottoms and tops pretty well the next cycle bottom would sometime come around the middle of June based off of this current cycle Which may suggest we may be heading lower for another couple of months But again the big test here is going to be determined by what happens with this uptrend and the combination of this downtrend at this point It is worth noting there is also another trend line that has formed off of the bottom Which is currently in place as well It has served that support and resistance to this point And again at this point We're just looking to see how this is going to come together because again a break of this support level an uptrend would certainly set us up for a decline back to that 33850 level where a rise above the black trend line would certainly set us up to potentially test back Move back up towards around 40-50 now. What's interesting is that we've already tested this black line on a couple of occasions Here's one here's two here's three Here's four times we failed each time we've gotten there. So get to be seen whether or not we're gonna get that high also when we look at the RSI you can see that the RSI still has a downward trend to it overall and That's important to note as well that momentum still remains fairly bearish and you can see the blue line Of course being the long-term downtrend that's been in place now since The January 5th highs and we go over to the Nasdaq the picture is a little bit different It's actually a little more clear what we're currently looking at here in the Nasdaq is what's called a 2b top This is a reversal pattern and this is notated by the fact that we closed on February 2nd at 12803 And then you can see if we zoom in a little bit here how we tried on one two Occasions tried to get above that 12803 But on each occasion we closed below the 12803 and this is a failed breakout attempt Which would also be called a 2b top reversal pattern and these patterns typically result in at least a decline back to around 11,700 to 11,800 but again, it wouldn't be surprising to see the complete reversal of this trend line now What's also impressive is that? This top also came around what's been a key level of support and resistance for the Nasdaq now around this 12,800 level as well Additionally, you can see the blue line off of the March 2020 lows Which makes connections with this point here this point here this point here this point and then of course you can see that more Recently it served as a little bit of support So a break of this uptrend and a break of support at 12,500 easily sets the Nasdaq up for a decline back to 12,200 or so at least in the immediate term and potentially back to filling this gap at 11,900 But again, the key here is that the 2b top needs to continue to hold if we were to break above and close above this 12,803 it would kill the 2b top reversal call and it could possibly set us up for a retracement all the way back to the August highs of 13,000 or so, but again to this point this top has been tested now several times And so really what we need to see is the Nasdaq either gap below these two support levels Or we need to see it break pretty decisively below it. You can see the momentum remains fairly bearish in the Nasdaq overall What's also interesting as well is if you were to measure this from this bottom to this top and then do an extension of that Comes off of it comes out to a 50% extension from this bottom to this top. So you have some good Fibonacci balance there as well And and so that's really what we're looking at from that perspective Additionally, there are some other things going on in the Nasdaq which are a little bit concerning This is the Nasdaq advanced decline line and you can see that there's been a very big divergence between The Nasdaq 100 and the Nasdaq advanced decline line overall And you can see that typically they tend to follow each other pretty well And there's been this very large divergence with the Nasdaq index moving up And the Nasdaq advanced decline line moving clearly lower And this is because there's a a little bit of a bifurcation in the market where you have Some of the very large technology names of big leaders The big mega cap names which have been kind of become a little bit of a flight to safety because of the size of their balance sheets And their cash flows and they're Certainly not in the financial sector And so you've seen a little bit of that and that's led to this divergence So what this is basically telling you is that the Nasdaq is not as healthy as it looks on the surface Additionally, here's another chart. This is the the cumulative Nasdaq number of new highs minus new lows And what's very clear is that the number of new lows on a cumulative basis has made a new low and typically in the past at least When this makes new lows typically the Nasdaq itself isn't too far behind And this is something to keep track of and and to watch because if we continue to see The number of new lows outpacing the number of new highs on a regular basis You're going to continue to see this number move down and that's going to be a negative for the Nasdaq overall So when you look at the Nasdaq and then you look at the s&p It kind of gives you a sense that maybe the setup in the s&p is leaning a little bit more bearish When you look at the the dow Jones, for example, you can see that we had That inverse head and shoulders pattern that we talked about briefly last time And uh, you can see that we got up to around this 12,000 32,600 area, which is a little bit of a zone of congestion I had noted that, you know, if we could get above that level, we had much further to go But to this point, this is where we've stopped and you can see we came down We came back up tested it again and to this point we failed which may mean That this is ultimately going to serve as a continuation pattern And you're going to see the dow actually break the 31,700 level in the not too distant future Of course, here's that diamond pattern we broke out of and a complete retracement of the diamond pattern Would suggest we go back to the the lows as well But again, the immediate next level after a break of 31,700 or so would would be a retest of the 30,200 area What is also very interesting as well is that you're seeing yields really hold up quite well with the 10-year treasury yield um what looks like Putting in potentially a double pot a double a triple bottom pattern And this is important because also if you extend this trend line out You can see that what what has happened here and what's taken place Is the 10-year has broken out come back down to and retested that trend line and that is actually held It's also important to note that this is around the 200 day moving average, which is also held relatively Speaking and so this level here at 3.55 percent is also a critical level Because if you notice we've tested this 355 percent level now on a couple of occasions where it's been supporting resistance and each time That's been broken. It has led to actually a new high On the 10-year at least in this cycle And if we were to break above this 3.55 region I think you're looking at a pretty clear and easy path for the 10-year to get back to 390 or so And it's not just in the 10-year you see this you also see this in the 30-year You can also see that there's a potential Triple bottom pattern that's formed here as well And this is also a very critical Thing to keep mind because again, here's your big level of resistance at 4 percent If we continue to extend this line off of here You can see that these trend lines have offered some support and here's your 200 day moving average So I would think that if we can get the 30-year to to really push beyond this 380 region You're looking at a return to around 4 percent and on the two-year That's continued to actually improve and show some signs of improvement It is taking a little bit longer than what I would have expected But not everything always goes according to plan And what we're seeing here is also the two years managed to hold on to this 200 day moving average It looks like we're trying very carefully to extend out of this falling flag pattern, which is actually a Reversal pattern and that would suggest we actually rise back to around 470 or so So again, this is something that work is worth monitoring and also you're seeing on the 10 to spread Which is also indicative of potentially a An increase here in in the two-year yield as you can see here that Here's your downtrend. Here's your gap. Here's your move higher and here's your Here's another trend line that comes off So again, if you were to see the two-year actually begin to move higher again There's an opportunity for the 10 to to actually come all the way back down to and refill this gap around negative 90 basis points Um, and that's sort of where we are in us markets if we take a look at germany the german dax Certainly has broken down finally It is again still showing some signs of relative strength The german dax has really been a very strong index Surprisingly so and again, it's been tending to kind of stick with the china reopening trade and we've seen a little bit of hong kong sort of the hong kong hsi rebound and and kind of I would say stabilize at this point And so we'll you really need to keep an eye on see what's happening here With the hong kong exchange And you also need to hang saying and you also need to keep an eye on the osi 200 index because again These are all sort of china plays and you can see the osi 200 Felt much more sharply than the dax But you can see that the dat the osi 200 is actually starting to show signs of maybe a little bit of reversal here And with the dax having this gap up here to fill at around 15600 It doesn't look all that impossible, especially if you start seeing Some strength out of the the hang saying in the osi on the osi 200 And then of course if you take a look at the footsie The footsie has also been battered because again, it's very heavily weighted towards financials But again the footsie also holding the 200 day moving average And this is also a key level of support around 7300 something to keep keep a watch of obviously Break of 7300 is no good and it's going to result in in a revisit to much lower levels While your upside resistance is somewhere around 7700 or so And if we take a look at some of the the rates in europe as well You can see the german two years really held on to this 240 level if we look at the german 10 You can see that that's also held some key support here around 198 If we look at the euro the euro has actually made some pretty good improvement here It's managed to hold to this trend line It's managed to hold support the big level of test comes really here at this 109 level You break above the 109 and a half area There's probably some room to run back up to around 111 while if you look at the british pound You can see that this is clearly resistance here at around 124 with your support level at 118 Again a break of resistance at 124 or so sets you up for an easy Probably climb to around 126 and a half to 127 While the dollar index is really struggled But you can see there's actually a little bit of a channel that's formed here And this could be indicative of a reversal coming So you just need to keep an eye on the dollar index and keep an eye on those two resistance levels On the euro and on the pound because if the dollar Begins to if you get a hot pce report Let's say on friday That could be an indication that the dollar is ready to go the other way because the market has mispriced Where inflation is heading and that obviously would be a negative for the euro And potentially sending it back down to the lower end of the range at 105 While you could see the british pound retrace and head back down towards 118 and a half to 119 So that's anyway, that's all I have for you. Um, I hope to hope this helps. Uh, and have a great weekend. Bye