It has been another week of headlines on Wall Street but we are closing out Friday with the expectation that we are very close to a deal with Iran where the Strait of Hormuz will be freely open to shipping traffic. Rather than re-hash the same topics we have seen over and over the last six weeks, I thought I would let the charts do the talking in this edition (see below).
Also, earnings reports will be out en masse over the next two weeks and on the 29th we will have the next Fed Meeting.
The S&P 500
The last three weeks have been strong and you can see we have broken resistance at 6975 which has acted as a barrier since last October. The momentum indicators at the bottom of the chart (RSI/MACD) have flipped to the positive so there may be some more upside in the coming weeks. Don’t be surprised of a re-test lower sometime next as the shorter timeframe charts are getting overbought.
OIL Prices Losing Momentum
Below is the OIL ETF and you can see the spike and reversal underway. The momentum indicators are warning of lower prices and this price action is likely to continue if a deal is cemented with Iran.
Technology and MAG7 Stocks
Apple has remained in its trend channel despite the oil volatility and the momentum indicators are turning up.
Google has made a sharp reversal to the upside.
Microsoft was down 30% from its most recent highs and almost re-tested its 2021 high at $351.
META last made a new high in July of last year and this multi-month correction has a chance of ending with continued upside.
Nvidia continues to be the market leader and last made a new high in October of last year. Momentum indicators at the bottom have warned of a larger pullback for months but those could reverse next week with this price action.
Below is the semiconductor ETF and it is going vertical into the weekly close. There must be some good earnings reports expected in the coming weeks. Lots of cash flow being generated in this sector.
It will be an interesting close to the month of April as the oil shock will reverberate into inflationary trends in the coming months. Plus, we will hear from the Fed and hear any change on their outlook.
Hopefully, the Strait of Hormuz stays open and the war machines go into low gear. Have a great weekend!
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Paul J McCarthy III CFA
President, Kisco Capital
