The Silly Season could peak soon..

Commodities (CRB) SELL SIGNAL














Semiconductor (SOX) SELL SIGNAL














Energy (XOI) SELL SIGNAL













NASDAQ EXHAUSTION SIGNAL

April- May is also known in the market as the Silly Season, a period where we experience the normal seasonal chance in the Market. Wild gyrations characterize the period as do temporary excesses in all directions.

Silly Season this time could turn into another inflection point fuelled by excess optimism and lots of Spin to foster the recovery story that has nothing real to show. All green shoots are within the statistical noise of all these time series and have no statistical significance. There might be some signs of relief but it is far to early and also highly dubious to interpret these 2. derivative green shoot noise as highly probable proof of a recovery. This is exactly what the market is pricing in.

Market tops are processes not data points so we have to look for leadership change or weakening to spot a potential turn. We find indications in the weekness of the NASDAQ and particularly there of the SOX (Semiconductor Index). Also we seem to observe exhaustion in the Energy as well as in the commodities space, which doesn't bode well for the recent OIL rally.

Conclusions:

1. We need Tech and Energy to recouperate their relative strength in order to sustain the rally or it will fail


2. The next correction has to defend the March low and should correct more over time rather than price in order to support the recovery story


3. The Euphoria in the Sentiment resembles eerily 1930 and should be taken as a warning
   

All taken together it means we enter a HIGH RISK period that could exacly do what most people do NOT expect, i.e. another 2008 replay.......