The S&P 500 made higher closes again this week but closed unchanged Friday to Friday. All of the indexes are poised to break out higher, and the basic breadth charts suggest that is probably what comes next. My strength indexes are at odds with those basic A/D lines and are meaningfully declining. The Nasdaq A/D looks weaker, but nothing is broken on those traditional metrics.

Globally, the markets were down a little more than 1%, but it is the second week of that drift lower. Commodity countries like Russia and Brazil were lower by about 2%, whereas Canada and Australia were flat on the week.

Commodities had an up week, as industrial metals were up nicely. I was highlighting this last week. However, there is a good saying that matches what happened this week. “Expect the expected”. The problem is I expected the miners to move in sympathy with the metals but instead they reversed lower rather than breaking out. When the expected doesn’t happen, that is worth noting. For me, the strong bounce in the dollar, more global weakness, a failure on the Shanghai to follow through, Sweden making four-week lows, the US markets unable to rally on significant, remarkable large cap tech earnings, the EV trades from last week all failing, miners rolling over, were all adding a smoky, stormy haze to the clarity I had last week. Some of the EV trades rallied Friday but none closed above the levels pointed out last week. Commodities have typically rallied in the weekend with a declining dollar, but Friday’s dollar jump changed all that.

Summary: I closed my industrial metal trades now that the copper miners to copper ratio uptrend has been broken. I hold a large number of oil trades. They are still profitable, but I’ll have to check my oil ego at the door if the overall market starts to pull back and these stocks start to dump. With big tech not able to rally the indexes, what will carry us higher?

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