Golden Top Arches

While the rally in shares of Carnival Cruise Lines is popping today after earnings, that chart remains broken and the gap looks to be nothing more than a retest of the prior $25/$26 breakdown level. Instead, I maintain that the likes of Costco, Walmart, and McDonald's are far better tests for the health (or lack thereof) of 80-90% of the nation's consumers. 

Recall that tomorrow's closing bell marks the official end of Q3 2026, which means the various quarterly candlesticks on your charts will be completed, in the books, so to speak.

Thus, as you can see on the MCD quarterly chart, below, barring a sizable gap higher in shares of McD's by tomorrow we will have strong downside confirmation (right arrow) to the reversal candlestick (top arrow) from back in Q1, as we previously noted both here and with Members. 

McDonald's has been a fascinating case study in one of the more potent long-term uptrends in market history, especially for a firm of its size and prominence. Even during the 2008 and 2020 (middle arrow) crashes, McD's never really stayed down for very long. In fact, ever since the infamous 2004 documentary Super Size Me, which put in a bottom after the dot-com bubble bust led to its own bear market (bottom left arrow), McDonald's has arguably been intact with its multi-decade uptrend ever since. 

That is, until now. 

The price action in recent quarters now strongly points to MCD having topped out on a long-term basis, as inflation squeezes profit margins and, most of all, the majority of McDonald's customers who simply cannot afford to volume and frequency of purchases they once could at McD's, with or without using the app to save some money and/or earn rewards.

Simply put, the toll for long-term inflation is manifested in the form of both the firm and the consumer getting squeezed in due time. 

While I expect management to try to adjust to changing consumer needs and wants, I also expect rallies to be sold for the foreseeable future in MCD as the prior years of endless rallying had priced in a perfect future which clearly has not come. 

Elsewhere, we have a mixed, drifting session as we await Micron earnings and some macro growth data the rest of this week.