Plant the Flag Here

We have a mixed bag in the markets today, another in a long line of those in 2023. 

Nasdaq names are doing the heavy lifting, with the likes of an earnings winner like DDOG way out in front. Meanwhile, small caps are red as I write this, with the regional banks (KRE ETF, daily chart, below) checking back to last week's breakout from prior resistance. 

Indeed, last week's rally brought out big and small guns alike in the market making bold calls for a regional bank bottom, with everyone from the folks on Twitter to Bill Gross, himself, calling for regionals to make a strong recovery from here. 

But just as I have argued with the Dollar and rates, what if the consensus turns out to be incorrect? How big a scramble do we see from the exits from out of position traders? So many are concerns with a year-end squeeze that the alternative may be the true pain trade scenario. 

One thing is for sure: Whichever side you are on, KRE versus $42 is looking like the plant-the-flag level for bulls to defend into this pullback. 

Elsewhere, commodities are getting walloped almost across the board. To my eye, this reinforces that the Dollar's run may not be over yet which, again, would spoil a great many bold year-end calls.