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New Yorkers’ old criminal records will be sealed automatically should they not reoffend for several years under a proposal that passed the state Assembly on Friday.The proposal omits perpetrators of high-level offenses, such as sex crimes and homicide.The bill, championed by Democrats, was castigated by Republicans, many of whom are eyeing crackdowns on crime. ‘I’m sorry, you committed it, you’re convicted of it … and some aspects of those will be with you forever, just like you did to your victim,’ Republican Assemblyman Anthony Palumbo said of the legislation.

People in New York who have old criminal records could have them automatically sealed as long as they remain out of trouble for a certain number of years under a bill passed by lawmakers in the state Assembly on Friday.

The ‘clean slate’ legislation would automatically seal most recent convictions — three years after serving time or parole for a misdemeanor, and eight years for felony convictions. Sex crimes and most Class A felonies, such as murder, will not be eligible for sealing.

The state Assembly debated the bill for almost five hours before passing it on a party-line vote, garnering applause and cheers. The state Senate is expected to follow and pass the measure, according to state legislative leaders.

Some liberal lawmakers and unions who support the bill say it would give New Yorkers a path forward that is not encumbered by past mistakes. They say a criminal record often means difficulty obtaining secure work and housing.

That’s the case for Ismael Diaz Jr., of Long Island, who was released from prison seven years ago and is still struggling to find secure employment.

Diaz, who served almost 10 years in prison for manslaughter, said he went through three rounds of interviews for a janitorial position at a supermarket before being told he was ‘unemployable’ because of his criminal record.

‘I was stressed out because I was trying to get a job and you can’t because of having a record,’ said Diaz, 52. ‘I want to earn a salary and take care of my family and start building up my life where it is supposed to be.’

Other states including Utah and Michigan have passed similar measures. California passed legislation last year that would automatically seal conviction and arrest records for most ex-offenders who are not convicted of another felony for four years.

Business groups including big companies like JPMorgan Chase and Verizon have also endorsed the New York legislation. They say increasing the labor pool would boost the state’s economy and make the state more competitive.

Under New York state law, employers can ask about conviction records at any point in the hiring process, but they must consider factors such as whether the conviction has any bearing on the person’s ability to do the job. But advocates for the legislation say that despite that, those with criminal records face huge barriers to stable employment.

Nearly 2.2 million people in New York have criminal convictions, according to a study by the Data Collaborative for Justice, a research center at John Jay College. The study is based on New Yorkers who had convictions from 1980 to 2021.

But Republican lawmakers and victim advocacy groups have criticized the legislation, warning it will take away accountability for those who have committed crimes.

‘I’m sorry, you committed it, you’re convicted of it, and unfortunately you have a debt to pay to society, and some aspects of those will be with you forever, just like you did to your victim,’ said Republican state Assemblyman Anthony Palumbo, also a former prosecutor, before floor deliberations. ‘I think this is completely disregarding the victims of those crimes and disregarding society as a whole.’

Palumbo said he favors an existing sealing statute in New York through which people can apply to seal their records depending on the type of conviction and whether they’re a repeat offender. But advocates for the state’s ‘clean slate’ bill said the application process is cumbersome and expensive.

Less than 1% of New Yorkers eligible for sealing criminal records through that statute have successfully done so, according to a study conducted by Santa Clara University.

The automatic sealing would not apply to a person who has a pending felony charge in another state.

The state Department of Corrections and Community Supervision, in coordination with the state Division of Criminal Justice Services, will be tasked to provide data to state administrative agencies so that they can seal eligible convictions.

Those sealed convictions could be later accessed by any court, prosecutors and defense attorneys under certain conditions, as well as by federal and state law enforcement agencies. Gun licensing agencies, law enforcement employers, and employers for work with vulnerable populations such as children and older adults will still be allowed to access the criminal records.

The original version of the bill excluded only sex crimes from automatic sealing and required seven years to pass until a felony conviction could be sealed.

New York Gov. Kathy Hochul said she wants to make sure the bill would not have ‘any negative, unintended consequences’ while also giving those with criminal records a second chance.

‘It’s not a simple answer. These are complicated issues, far more than people may realize at first glance,’ Hochul told reporters at an unrelated event earlier in the week. ‘My goal as governor is to make sure we have forward-thinking, progressive policies that actually work.’

The bill would go into effect one year after it is signed into law.

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A new Indiana law’s provision barring teachers from providing instruction on ‘human sexuality’ to students from pre-K through the third grade is unconstitutional and so vaguely written that teachers wouldn’t know whether they are complying with it, a federal lawsuit filed Friday argues.

The American Civil Liberties Union of Indiana’s lawsuit targets a portion of a new law that also requires schools to notify a parent if a student requests a name or pronoun change at school, but it does not challenge the pronoun and name change notification provision.

Republican lawmakers approved the law this year during a session that targeted LGBTQ+ people in the state. It is due to take effect July 1 after Republican Gov. Eric Holcomb signed it into law in May.

The ACLU’s lawsuit names Indiana’s secretary of education, Katie Jenner, as the defendant and seeks an injunction preventing the ‘human sexuality’ instruction provision from taking effect July 1.

The office of Attorney General Todd Rokita issued a statement saying it ‘will review the lawsuit and defend what the duly elected legislators find to be the appropriate age for sexuality discussions with Indiana’s elementary school students.’

The suit contends that by prohibiting Indiana teachers from providing ‘human sexuality’ instruction to students from pre-K through third grade, it violates their First Amendment rights.

Because the law defines neither ‘instruction’ nor ‘human sexuality,’ the complaint also contends, those terms ‘are impossibly vague and lack any ascertainable standards for determining whether or not the law has been violated.’

Ken Falk, legal director for the ACLU of Indiana, said it ‘is written so broadly that it would be next to impossible for teachers to determine what they can and cannot say to students.’

‘In addition, teachers have a First Amendment right to express themselves as private citizens outside of the classroom, including in the school’s hallways, playground, or before and after school, but the vagueness of this law would certainly have a chilling effect on those rights,’ Falk added in a news release.

The suit also contends that the provision violates the due process clause under the Fourteenth Amendment of the U.S. Constitution.

It was filed on behalf of a teacher with Indianapolis Public Schools, Kayla Smiley, who will be teaching students in grades one through three in the upcoming school year and states that she maintains a classroom library with ‘age-appropriate books across a diverse spectrum of subjects and concerns, including LGBTQ issues, such as biographies of Harvey Milk, and Elton John.’

The suit adds that Smiley ‘has no idea whether these books’ qualify as instruction on human sexuality.

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Energy Secretary Jennifer Granholm admitted in a letter Friday that she made a false statement when she recently told lawmakers she didn’t own any individual stocks.

While Granholm divested from a variety of stocks in 2021, she acknowledged in the letter — which was sent to Senate Energy and Natural Resources Committee leadership — that she maintained shares of six companies. On April 20, however, Granholm testified under oath that she had sold all of her shares of individual companies.

‘As you know, as part of the confirmation process before this Committee, in 2021 I divested from assets that could be in conflict with my official duties,’ Granholm wrote in the letter obtained by Fox News Digital. ‘I did, however, retain assets that were determined by Government ethics officials to not conflict with my official duties.’

‘I mistakenly told the Committee that I did not own any individual stocks, whereas I should have said that I did not own any conflicting stocks. In order to make my financial holdings consistent with my testimony, on May 18, 2023, I divested my remaining stock holdings which consisted of stock in six companies, even though these assets were deemed non-conflicting,’ she continued.

Granholm didn’t say in the letter which companies she had owned shares of — and which she divested from on May 18 — but vowed to share that information in her Annual Public Financial Disclosure Report in mid-June.

In addition, Granholm said she discovered on May 13 that her husband Daniel Mulhern owned $2,457.89 worth of shares in Ford Motor Company. Those shares were then sold on May 15, a Monday, when the stock market opened.

Granholm acknowledged she hadn’t disclosed those shares in her two prior Public Financial Disclosure Reports and had mistakenly believed her family’s divestiture of Ford was complete in early 2021. The Ford stock she and her husband held in their retirement accounts had been sold off on March 22, 2021, she said.

‘As a public servant, I take very seriously the commitment to hold myself to the highest ethical standards, and I regret the accidental omission of my spouse’s interest in Ford,’ Granholm added in the letter. ‘This is a commitment I made to you, the President, and most importantly the American people.’

‘My spouse and I have double-checked our financial assets, and there are no other reportable assets that were omitted from my financial disclosure report,’ she concluded.

In response to the letter, Senate Energy and Natural Resources Committee Ranking Member John Barrasso, R-Wyo., criticized Granholm.

‘Secretary Granholm lied to the committee about her family’s stock holdings,’ Barrasso said in a statement to Fox News Digital. ‘This comes after her failure to follow basic ethics and disclosure rules. This is a troubling pattern. It is unacceptable.’

Granholm noted that all of her transactions listed in the letter would be disclosed on a Public Financial Disclosure Periodic Transaction Report in July.

In a statement to Fox News Digital, an Energy Department spokesperson said Granholm remained committed to ‘the highest ethical standards.’

‘The Secretary takes the commitment to uphold the highest ethical standards very seriously, which is why, upon realizing a comment made in error, the Secretary moved quickly to divest non-conflicting assets along with an asset held by her spouse of which she was previously unaware,’ the spokesperson said. 

‘The letter submitted to Congress clarifying the record underscores the Secretary’s commitment to transparency and to leading a DOE that puts the interests of the American people above all else.’

E&E News first reported the letter.

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A Texas appeals court on Friday dismissed a billionaire’s defamation lawsuit against Democrat Beto O’Rouke that was brought after O’Rourke criticized a $1 million campaign contribution to Republican Gov. Greg Abbott.

The ruling by the Third Court of Appeals in Austin comes more than a year after O’Rourke repeatedly made critical remarks about the donation during a failed run for governor, at one point saying that it ‘looks like a bribe to me.’

The contribution came from Kelcy Warren, chairman of pipeline company Energy Transfer, which reported about $2.4 billion in earnings related to the catastrophic February 2021 winter storm that sent natural gas prices soaring in Texas.

Warren, a major Republican donor, accused O’Rourke of trying to humiliate him and discourage other Abbott supporters from making campaign donations.

In the court’s opinion, Chief Justice Darlene Byrne wrote that a reasonable person would view O’Rourke’s statements as ‘the type of rhetorical hyperbole that is commonplace in political campaigns.’

Dean Pamphilis, an attorney for Warrren, said the decision would be appealed to the Texas Supreme Court.

Abbott’s campaign said at the time that it was not involved in the lawsuit. The governor went on to easily beat O’Rourke and win a third term.

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One of my favorite parts of hosting a show on StockCharts TV is being able to interview analysts, traders, and money managers with all sorts of different backgrounds. 

Recently, I was asked in our mailbag segment about why and how my guests can have very different takes on the markets at any given moment. The reality is that even though we all use a similar toolkit, our backgrounds and life experiences and professional trajectories are all embedded somewhere in our analysis. Whether we like it or not, who we’ve been up until now most likely affects how you’re analyzing the charts.

And sometimes the evidence is just, well, cloudy. Much like the weather in Redmond, Washington, volatility and uncertainty are just part of the picture. I feel I’ve gained so much over my career by actively engaging those with a different perspective, as it’s forced me out of my own narrative and allowed me to consider other points of view. So when I see the S&P 500 index bumping against the “ultimate resistance level” around 4300-4325, I can’t help but consider some different potential future paths.

So what may come next for the S&P 500?

First, let’s set the stage.

If we consider the 2022 bear market phase as the framework for a Fibonacci analysis, we come up with three important levels to watch. First, the 38.2% retracement level hits right around 4000, which was first reached in November and preceded the drop down to the December low around 3800. Second, the 50% level is right around 4155, which was pretty much where the February 2023 high ended up; note how many times we tested this level during the congestion phase in April and May!

That brings us to this week, where we have now tested the 61.8% level for the first time since the August 2022 high. If you were wondering why so many are focused on the 4300 level for the S&P 500, this chart should make it pretty clear!

Now we’ll lay out four potential scenarios for the S&P 500 over the next six to eight weeks. And remember the point of this exercise is threefold:

Consider all four potential future paths for the index, think about what would cause each scenario to unfold in terms of the macro drivers, and review what signals/patterns/indicators would confirm the scenario.Decide which scenario you feel is most likely, and why you think that’s the case. Don’t forget to drop me a comment and let me know your vote!Think about each of the four scenarios would impact your current portfolio. How would you manage risk in each case? How and when would you take action to adapt to this new reality?

Let’s start with the most optimistic scenario, involving a strong summer push for stocks.

Scenario #1: The Super Bullish Scenario

What if the great bull market of 2023 is just getting started? Let’s say Apple doesn’t stop, pushing to a new all-time high and even higher. The mega-cap growth trade which has worked for most of 2023 just keeps working.

In this scenario, 4300 recedes in the rearview mirror and pushes above 4600. We may even see new all-time highs for the S&P 500 index! Breadth conditions improve as pretty much everything is pulled along for the ride. Onward and ever upward!

Scenario #2: The Mildly Bullish Scenario

What if the mega cap growth stocks remain strong, but the pace of the uptrend slows considerably? Charts like AAPL and MSFT pull back as investors digest the gains they’ve enjoyed in these winning stocks in 2023. Value-oriented sectors like Energy and Financials may do well in this scenario, but, because the leadership has changed away from the growth sectors, it means limited upside for our growth-oriented benchmarks.

In this scenario, the S&P 500 does break above 4300, but does not get much further beyond that. Bulls are frustrated but still doing okay, and bears begin to really question their sanity.

Scenario #3: The Mildly Bearish Scenario

What if 4300 holds and this ends up being the top until the fall months? The mildly bearish scenario would mean that the mega growth trade chills out in a major way, and the market goes into profit-taking mode.

Perhaps we find the inflation data next week is way higher than expected, and the market gets a short-term downside shock. What’s interesting here is the S&P 500 could go all the way down to around 3800, remain above the March low, and still put in a higher low. This mildly bearish scenario may just be a pullback within the context of a long-term bull phase in 2023, but the next couple months are a little rough.

Scenario #4: The Super Bearish Scenario

Here’s where things get very hairy very quickly. What if there is a downside shock of sorts, causing the Fed to take drastic action that pushes risk assets lower? Investors rotate quickly to defensive positions, but this creates a feedback loop of bearishness. Fear of losing everything takes hold and investors go into a full-on fetal position.

Gold rips to the upside as “rocks over paper” becomes the trade of the year. The entire game plan for the Fed is brought into question and we’re left wondering what happened to the great bull market of 2023. 3800 comes and goes and we are talking again about retesting the October 2022 lows around 3500-3600.

Okay, so have you decided which of these four potential scenarios is most likely based on your analysis? Head over to my YouTube channel and drop a comment with your vote and why you see that as the most likely outcome.

And don’t forget to think through all the other scenarios as well. Only by stretching out of our comfort zones and considering other points of view are we able to better handle whatever the future may actually hold!

RR#6,

Dave

P.S. Ready to upgrade your investment process? Check out my free behavioral investing course!

David Keller, CMT

Chief Market Strategist

StockCharts.com

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

The author does not have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author and do not in any way represent the views or opinions of any other person or entity.

Looking at the monthly charts of the four major indices as we hit mid-June, all but the Russell 2000 are trading above their 23-month moving average. Thus far, this is in line with our prediction that, by the time IWM hits (if it does hit) 190-200 and the SPY hits 440, the top will be in.

First, the Russells have to clear their HUGE resistance at 1900. SPY has to take out the August 2022 highs and NASDAQ, well overbought, has to get above 370. Right now, with so much economic data coming up, we are finding it best not to be in a bullish or bearish camp. Rather, we like to think like a trader and not get too wedded to a bias.

Thus far, looking at some key ratios from our Big View product, we have stayed on the right side of the market. All signal risk on. The SPY is doing better than gold and outperforming the long bonds. Junk bonds are doing better than long bonds. Those ratios made it clear that the tech rally, long in the tooth, would attract retail money into the small caps, value stocks, retail sector, and some basic materials.

The first 5-6 months and this ongoing rally make alot of sense. As the market is forward thinking, investors saw the Fed slowing down rate hikes, inflation cooling, earnings better than expected, a mixed-yet-robust labor market, tech undervalued, and perhaps the worst over for economic contraction.

The big question now is what about the next 6 months-what will the market think the forecast is?

Here are the upcoming reports to look forward to this week.

Of course, the biggie is the Fed, but, regardless, we still believe inflation round 2 is coming. Recent weather threats (from storms to drought), Canadian fires, issues in the Panama Canal and the West Coast potential port strike could easily weaken the dollar and spike the commodities. Plus, there’s oil and OPEC; folks are thinking lower oil prices in store, but we know the Saudis want to control supply.

As for the Fed, our guess is they will pause for June. And they should. But even if they raise .25%, can they control supply chain issues and a persistent lack of certain raw materials?

Another feature is that the Treasury is about to buy a trillion dollars of short-term bills, announced this week and then completed on the 12th. The impact on fixed-income bond ETFs is what we are watching. The Government needs to raise money, and auctions are meant to get competitive pricing from buyers (retail and institutional). However, it all comes down to supply/demand.

For picks, please watch recent media links listed below.

For more detailed trading information about our blended models, tools and trader education courses, contact Rob Quinn, our Chief Strategy Consultant, to learn more.

“I grew my money tree and so can you!” – Mish Schneider

Get your copy of Plant Your Money Tree: A Guide to Growing Your Wealth and a special bonus here.

Follow Mish on Twitter @marketminute for stock picks and more. Follow Mish on Instagram (mishschneider) for daily morning videos. To see updated media clips, click here.

Mish in the Media

Mish and Charles talk inflation fears, the “wall of worry” and trading large-caps on Fox Business’ Making Money with Charles Payne.

The first 5 months of 2023 have been rallying on optimism going forward. Will that continue for the next few months? Mish digs into that question in this Twitter Spaces conversation with Wolf Financial.

Mish discusses impacts of weather, labor market and the FED on tap on Fox Business’ Coast to Coast with Neil Cavuto.

The US dollar rallied following a positive US jobs report last Friday, but could the Federal Reserve’s upcoming interest rate decision halt the greenback’s rise? Mish offers her views on USD/JPY, the S&P 500, and light crude oil futures on CMC Markets.

Mish talks GME (Gamestop) and more on Business First AM.

Where is the US economy actually heading? Rajeev Suri of Orios discusses this question and what trends suggest with Mish in this video.

Mish joins Rajeev Suri of Orios Venture partners to discuss the Fed, inflation, and buybacks in this video on LinkedIn.

In this episode of StockCharts TV’s ChartChats, Mish Schneider and TG Watkins (creator of the Moxie Indicator) sit down for a candid chat about working with other StockCharts contributors. Learn what TGs strategy for trading is, and how the the Moxie Indicator came to be. Mish shares her background and how she got started in the industry.

With Congress having reached a deal after months of debt ceiling talks, what direction could the US dollar move in, and what could this mean for the USD/JPY? Mish explores the market movements in this appearance on CMC Markets.

Mish joins Rajeev Suri of Orios Venture partners to discuss the trend toward a risk-on situation in this video on LinkedIn.

Mish weighs in on the overnight slump across the board on the benchmarks and where the momentum is heading on Singapore Breakfast, available on Spotify.

Mish explains how reversal patterns could come to the fore this week in this appearance on CMC Markets.

Mish joins Rajeev Suri of Orios Venture partners to discuss the possibility of economic stagflation in this video on LinkedIn.

Mish discusses how AI is being used to invest in this article for BNN Bloomberg.

Coming Up:

June 12: BNN Bloomberg Opening Bell + TD Ameritrade with Nicole Petallides

June 13: Daily Briefing on Real Vision

June 14: CMC Live Trading in London 1:30 ET

June 22: Forex Premarket Show with Dale Pinkert

June 23: Your Daily Five on StockCharts TV

ETF Summary

S&P 500 (SPY): August 2022 high 431.73, and of course 420 now key.Russell 2000 (IWM): 180-now must hold while still miles from its 23-month MA 193.Dow (DIA): 23-month MA 337 pivotal support now.Nasdaq (QQQ): Interesting inside day after yesterday’s drop. Makes 348.18 important for Fri. close.Regional Banks (KRE): 45.50 significant resistance. 44 mild support.Semiconductors (SMH): Inside here after yesterday’s decline making Wednesday low important.Transportation (IYT): 233.50 is significant resistance.Biotechnology (IBB): 121-135 range.Retail (XRT): 60 now support and 63 resistance.

Mish Schneider

MarketGauge.com

Director of Trading Research and Education

What a week the market had!

At the start, things looked positive for the S&P 500 index ($SPX). The index finally broke above the 4200 level, the debt ceiling issue was resolved, and the probability of a Fed interest rate pause was relatively high.

But on Wednesday, things changed. Canada and Australia raised their benchmark interest rates, which may have spooked investors. Treasury yields rose, and US equities turned lower the day after the S&P 500 had closed at its 10-month high and Nasdaq Composite at its 14-month high. The probability of a Fed rate hike, according to the CME FedWatch Tool, rose from around 25% to 36%. 

Investors fled to small-cap stocks. All of a sudden, the large-cap growth stocks that were in the spotlight for the last few weeks—thanks to the AI buzz, Apple’s unveiling of its Vision Pro headset, a Goldilocks jobs report—were selling off.

But things were different on Thursday. The S&P was back in bull market territory, the probability of a Fed interest rate pause was above 70%, and recession worries were a distant memory. Does that mean the bear market is over? It’s worth looking at the chart of the S&P 500 to get a closer look. 

S&P 500 Technical Outlook 

Since April, the S&P 500 index has been moving in a slightly upward channel (see daily chart below). On June 2, the index broke above the 4200 level and the top level of the upward-sloping channel.

CHART 1: S&P IN BULL MARKET TERRITORY. Will the breadth indicators support the up move?Chart source: StockCharts.com (click chart for live version). For educational purposes only.

The index is trading close to its 52-week high, above its 50-, 100-, and 200-day moving averages and market breadth shows that participation in the uptrend is moving higher.

The percent of S&P 500 stocks above their 200-day moving average (panel below price chart) is moving higher. The indicator has broken above its 20-day moving average, although it would be more confirming if the moving average trended higher.

The S&P 500 Advance-Decline Percent, which measures the percentage of net advances, is displayed in the middle panel. The indicator shows a decline in the percentage of S&P 500 stocks participating in the advance.

Switching gears to sentiment, if you look at Consumer Discretionary versus Consumer Staples, Consumer Discretionary is advancing. This suggests that consumers are gravitating towards an offensive strategy, rather than a defensive one.

So the daily chart is giving mixed signals. To clear things up, it may help to get a longer-term perspective by turning to the weekly chart. If you bring up a five-year weekly chart of the S&P 500 index (see below), it’s interesting to see how the index bounced off its 200-week moving average in October 2022 and has been in a gradual uptrend.

CHART 2: WEEKLY CHART OF S&P 500. The index has broken above a consolidation pattern, which could indicate more upside.Chart source: StockCharts.com (click chart for live version). For educational purposes only.

The index has broken above a triangle pattern and, if it continues in this direction, the S&P 500 could move toward its January 2022 high. If that’s the case, the bear market may be over!

But it’s unclear if we’re out of the woods yet. Economic data indicates that inflation is still in play and the labor market is tight. We’ll be getting more data next week ahead of the Fed meeting. If Chairman Powell suggests that past interest rate hikes have had an impact and conditions are status quo, then there’s a strong chance that the market will continue higher.

Final Thoughts

One thing that’s sure is investor sentiment can flip on a dime. As of now, the S&P 500 is still trending higher. But if it breaks to the downside of either the weekly chart’s consolidation pattern or below the daily channel, you may want to adjust your portfolio holdings to sync with the market. Keep an eye on the Sector Summary and Market Summary pages on your StockCharts platform.

End of Week Wrap Up

Dow, S&P 500, Nasdaq up; volatility down

Friday’s close: $SPX up 0.16%% at 4298.86.xx, $INDU up 0.13% at 33,876.78; $COMPQ up 0.16% at 13259.14$VIX closed at 13.85Best performing sector for the week: Consumer DiscretionaryWorst performing sector for the week: Consumer staplesTop 5 Large Cap SCTR stocks (Friday’s close): Samsara Inc. (IOT); NVIDIA Corp. (NVDA); Palantir Technologies, Inc. (PLTR); MongoDB, Inc. (MDB); Meta Platforms, Inc. (META)

On the Radar Next Week

May Consumer Price IndexMay Producer Price IndexFederal Reserve Interest-rate statement and presserUS retail salesConsumer sentiment

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

Note: For the sake of brevity, this article will take a bullish and long-only approach. If you’re interested in going short, you can apply this information, but in reverse.

How can you efficiently use the Ichimoku Kinko Hyo (aka Ichimoku Cloud) indicator to find trading opportunities, especially when it has so many moving parts with bullish and bearish combinations?

As described in ChartSchool, the Ichimoku Cloud is a comprehensive indicator designed to produce clear signalsComprehensive and clear, but also complex in many cases, and everyone who uses these indicators has their preferred way of combining the components.

One approach, which can help simplify the process and make it more efficient, would be to use the Chikou Span (aka Lagging Span) to assess current price action and future price targets. In short, you’d look 26 periods back to speculate what might happen between now and 26 periods into the future. Yes, that sounds strange, but if you give it a chance, it’s actually quite useful.

Not familiar with the Ichimoku Cloud and the different bullish and bearish indications derived from its five components? You can review it here.

One bullish signal is that of price moving above the cloud. StockCharts has a scan for this pattern event. Because it tends to produce lots of results, it’s best to modify it by raising the daily volume (included in the code below).

How to Do a Price-Moving-Above-Cloud Scan

To scan for this pattern event, do the following:

Go to Member Tools > Advanced Scan Workbench > New

Copy and paste the following code: 

[type = stock] 

AND [country is US] 

AND [[exchange is NYSE] OR [exchange is NASDAQ]] 

AND [market cap > 100] 

AND [Daily SMA(20,Daily Volume) > 500000] 

AND [Daily Above Ichimoku Cloud is true] 

AND [yesterday’s Daily Above Ichimoku Cloud is false] 

Click the Run Scan button.

The scan produced many results. One of the candidates was Allegheny Technologies (ATI).

CHART 1: ALLEGHENY TECHNOLOGIES BREAKS ABOVE ICHIMOKU CLOUD. Could this stock be a candidate for a future trade?Chart source: StockCharts.com (click chart for live version). For illustrative purposes only.

Price has moved above the cloud—what the scan picked up. When price moves above the cloud, it’s a signal to monitor for future opportunities. If you go back to December 2022, the blue arrow shows a time when price broke above the cloud.

Here’s what you need to look out for. The Lagging Span (the green line) plays an important role. When it’s above the conversion line, base line, price, and the cloud (all Ichimoku lingo), it indicates the likelihood of a stronger degree of buying pressure supporting the trend. The Lagging Span will be 26 periods behind the current price. 

So, in the chart above, the buy signal came later when price broke above the conversion line (second blue oval). If you had entered a trade at that time, you would have made a good return, as long as you exited the trade at around the time when the conversion line crossed below the base line and the Lagging Span turned lower.  

Looking at the current price on the chart of ATI, the Lagging Span is moving higher above the cloud, but the cloud has turned red. A lot will depend on how much upward momentum the price has, as it’s within the now-bearish cloud.

Let’s take a look at another scan result, the stock of a company you may be familiar with—Blackstone Group (BX).

CHART 2: BLACKSTONE GROUP’S SIX-MONTH SYMMETRICAL TRIANGLE. This is a stock to patiently watch.Chart source: StockCharts.com (click chart for live version). For illustrative purposes only.

Notice the extremely lengthy symmetrical triangle formation that’s been playing out over the last six months. The response to this Ichimoku scan would be iffy and one to patiently watch. Why?

Because of the following reasons:

The stock is consolidating and not trending.The lagging span isn’t in a position that’s signaling (let alone confirming) a bullish development.The triangle is setting up for a breakout.

The Ichimoku Cloud (26 periods ahead) and the lagging span (26 periods behind) may provide you with early trading or confirmation signals once the breakout occurs.

The Bottom Line

The Ichimoku Kinko Hyo indicator, or Ichimoku Cloud, is a comprehensive tool that can yield fruitful trading opportunities, but must be used correctly. Although the cloud’s many moving parts may initially seem daunting, its components can be harnessed to efficiently evaluate current and future price action. This article presented an analysis of a bullish signal—price moving above the cloud—and illustrated how scanning for such stocks can help you cut through the noise of this complex indicator.

However, the scan’s results highlight potential opportunities for closer monitoring, rather than providing immediate trading signals. The Lagging Span plays a critical role here; when all its conditions are met, it indicates strong buying pressure supporting the trend. However, remember that vigilance and patience remain key virtues, especially when the signals indicate a need to wait, as demonstrated in the Blackstone Group example. The ideal outcome always relies on tool efficiency, insightful analysis, and strategic timing.

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

On this week’s edition of Moxie Indicator Minutes, TG discusses how the market has suddenly awoken, with more names are starting to breakout and participate in the long side after basing for a year. He takes a look at the overall conditions and how he sees the market setting up in a positive way.

This video was originally broadcast on June 9, 2023. Click this link to watch on YouTube. You can also view new episodes – and be notified as soon as they’re published – using the StockCharts on demand website, StockChartsTV.com, or its corresponding apps on Roku, Fire TV, iOS, Chromecast, Android, and more!

New episodes of Moxie Indicator Minutes air Fridays at 1:15pm ET on StockCharts TV. Archived episodes of the show are available at this link.

After a huge rally off the March lows, the first full week of June saw the markets move sideways for the most part. At noon on Friday most US indexes were up marginally on the week. The charts below are all 60 minute charts.

Nasdaq 100 (QQQ)

The black line represents last Friday’s close. The Nasdaq 100 had surged up to this level to start the prior week, so the advance by the top 100 is pausing at this point. Consolidation is warranted after a heady advance.

The S&P 500

The SPY is trying to point north. At noon it was up 1/2% on the week. It is up a little more than the Nasdaq and breadth within the 500 stocks is still positive.

Dow Jone Industrial Average

The DIA was up 0.20% on the week at noon. A steady climb from Tuesday’s low helped the index get back on positive ground for the week. The chart has accelerated nicely from 2 weeks ago.

Russell 2000 (IWM)

The IWM has been the story for two weeks and it definitely played catch up. It was up 9.4% from the low two weeks ago to this weeks high and up 1.96% from last Friday’s close as of noon Friday.

The $TSX (XIU.TO) (Canada)

The Canadian market is down 0.67% at noon on Friday and the chart is not enjoying the buoyancy shown in the USA. The sideways performance over the last three weeks demonstrates the difference between the markets. One significant difference for the USA is the number of technology stocks. While the Russell 2000 has lots of banks, industrials, materials and energy names that perked up this week, it seems the Canadian market missed the same thrust outside of technology on the Canadian exchange.

The big boosters in the USA have been semiconductors and software over the last two months.

Semiconductors

SMH is a semiconductor ETF. Flat over the last two weeks, this chart tried to break out to the upside this morning and is definitely one to watch. Many of the semiconductor names are either forming bull flags or distribution.

Software

IGV is a software ETF. There are many to choose from, but I’ll use IGV. It is flat from last week and flat from the Tuesday morning surge on May 30th.

While there are still stocks going higher, it is starting to look like the sideways consolidation is taking place. Watch closely to see which way this resolves.

If you would like to see more of what we do at Osprey Strategic, we offer a $7 trial for the first month where you can look through our videos and newsletters from the past few weeks as well.