SGT Chart Book

Market Observations|03 Jul 2023

We are halfway through a very interesting year. A look at the global equity markets shows a large disparity.

The Nasdaq established itself as the poster child for 2023, so far up 30%, with the Dow +3%, SP500 +15% (the tech sector accounting for approximately 60% of the first half gains in the SP500). European markets are showing a similar divergence with the UK basically flat for the year while European bourses are up - Germany up 15% and the French up about the same; not bad when you consider the headwinds.

Here is a quick list of events of 2023 thus far:

Inflationary fear has seen central banks signal that there’s still more work to do.
Bank failures: 4 in US and one very large one in Europe.
Continued geopolitical uncertainty.
US debt ceiling uncertainty/drama.

SP5500

A.I. assisted rally, with mega tech stocks leading the way. With some of the big names posting over 100% gains (Nvidia +180%), is it all hype or is this here to stay? Chart-wise we need to break above these old tops to encourage the momentum traders to join in on this latest rally. The pullback has allowed for indicators to come off overbought levels.

Apple

How long will the bull market be driven by mega cap stocks like Apple? As the chart confirms “the trend is your friend”. 2023 has seen Apple stock climb by 45% to be > $3 trillion market cap.

US10YEAR

Many people look at the bond markets’ yield inversion between the 2 year and 10 year spread, which is now circa -100 basis points, as a good gauge of an impending US recession. There seems to be resilience in the consumer and the labour markets, although the recession story is still under debate. As we see in chart below, the price has poked its head above the downward sloping trendline.

BTCUSD

Consolidation after the breakout last week - this can be expected with the RSI showing overbought conditions.

ETHUSD

In a perfect chart world, we would expect the uptrend to continue after we re-tested the initial break level. A rest of recent highs cannot be ruled out.

LTCUSD

This crypto played catchup last week with an aggressive upside break out as the chart below shows.

Happy trading - until next time,
SGT Trade Desk

Disclaimer: Trading Desk Observations are not trade recommendations. The purpose of these charts is to bring to your attention potential chart patterns you may wish to monitor.