Mining the Madness- September 13th, 2020

The US markets closed lower with another drop in the technology names. This week saw a decline in almost every sector. The materials were marginally positive, avoiding the downward suction. Materials includes fertilizers, chemicals, mining names to list a few. With the solid moves in Corn and Soybeans, the fertilizer names held up. Energy was the worst sector once again. Technology, Communications and Semiconductors were demonstrative of the technology weakness.

The former leaders were hit again. Most of the big names (FANMAG) are
hovering around the 50-day moving average. That’s significantly lower in 7
trading days, but the upside euphoria was also significant leading into the
drop. Tesla was down another 10% trying to bounce off the 50-day. The week
was a little chilling, much like snow showing up on the mountain peaks this
week. As the season changes from summer to fall, it seems the market chill is
upon us.

Commodities were down on the week, with oil falling hard. Oil moved down
toward a support level around $35 to finish at $37.33. The weekly low was
$36.13. If the support at $35-$36 doesn’t hold, $29 would be a next stop
target. Yecch! In currencies the British Pound got smoked for 7 cents in a couple of weeks. The US dollar moved up, and most of the commodity currencies were weaker. That’s not great! The Euro and the Yen traded sideways. Both the European and Japanese stock markets were up this week, in a big contrast to the US drop.

Summary: Tech continues to be sold. My courage to be long is suspended. Ahead of the election, some patience is needed here. But
it is a good time to stalk the names you want to own. Watch the charts for bottoming patterns. Some of the big names are off 20%.

Let’s jump into the charts