All Star Market Timing

The Daily JDV Market Timer - January 31, 2022

Folks,

Market Observations for the Week: The SPX and NDX continued their recovery rallies from last week amidst continued skepticism from many traders and investors. We believe that 2022 will be a bear market year but our short-term market bias is now BULLISH because the decline in the SPX from 1/4  to 1/24 was only a “3-wave down correction” as opposed to a “5-wave down correction” for the IWM. The SPX declined 12% into 1/24 and the market got as oversold as it did going into the Covid low at 3/23/20 by several measures. Our Option Premium Ratio indicator tested the 5-year high of the Covid SPX low and today completed an “island reversal” pattern which is bullish. In the short-term, we are expecting a violent short-covering rally in the SPX that could take us up to a test of the Jan 4 high at 4819. Be agile, cash is our largest position (~50%) and our best asset in this volatile market but we have some SPY and FCX shares to play the short-covering rally into 2/1-2/3. Bitcoin is holding up around 38585 Monday and a symmetry move could take us to 41000 by the 2/1-2/3 New Moon Timing Window. Crude oil continues to hold up and could give us a spike higher to test $90 by the New Moon. We remain in >50% cash because of the macro factors facing the global economy (Chinese credit contraction, rising global inflation, and rising global rates, new Covid variant, etc.) but we would put a small fraction of that cash to work on a “stink bid” basis with a VIX spike above 40. The gold bears took control on 1/26 and pushed gold down to $1780 before a corrective bounce back to test $1800 on Monday – a symmetry correction for gold could take us down to $1725. The US 10-yr rate has been going sideways from last week. The USD tagged 97.44 on Friday and gave us a divergent high to its SMI oscillator – it is close to giving us an EW a-b-c correction on the hourly chart.

1/31/22 (Commentary for Monday) The SPX and NDX gave us another rally day Monday before the market gets to digest earnings from GOOG, FB and AMZN in the next three market days. Considering how the market rallied after the MSFT and AAPL earnings, we are not inclined to hold bearish positions this week. Also, the “island reversal pattern” in the Option Premium Ratio is giving us a clear message Monday night –“buy the dips in the SPY” for a violent, short-covering rally into the 2/1-2/3 New Moon Timing Window – we are holding a short-term trading position in the SPY and FCX to capture this. Our very short-term market bias has swung to BULLISH. The mid-point of the current Mercury retrograde cycle fell on 1/24 and gave us the SPX low at 4222. The combination of Mercury retrograde, and Uranus retrograde has been a volatile brew for the market since 1/14, but markets can often reverse on the midpoint of Mercury retrograde as the SPX did last week. The bears took control of gold on 1/26 and slammed it down below important support to $1780 on Friday before a corrective rebound back to test $1800 – we are only getting a corrective bounce into the New Moon and a symmetry correction could take us down to $1725. Overall, we still hold >50% cash as we feel that the macro risks of being 100% long are just too great with the global credit contraction led by China still progressing and a now more hawkish FOMC targeting inflation. The US economy is highly levered to widespread speculation in stocks, stock options and digital currencies and trading profits may be difficult this year. In the US, the background monetary conditions have been deteriorating for months and (see the Closed End Fund (CEF) bond sector A/D line). Chairman Powell’s hawkish use of the “inflation word” in his press conference on 1/26 did send rates higher last week but rates have gone sideways into Monday. After increased tensions in Ukraine, the USD tagged 97.44 on Friday before pulling back in what looks like an EW a-b-c correction.

 

Big Picture on Stocks (UPDATED) – Our short-term market bias changed to BULLISH Friday as the IWM undercut its Monday low at 191.3 into the 1/27-1/28 turn window and our Option Premium Ratio indicator tested its 5-yr high– we prefer to hold cash over shorts and will buy the SPY on dips into the 2/1-2/3 New Moon Timing Window. We are holding about 60% cash in our trading accounts but are holding a short-term position in the SPY and FCX this week.

Big Picture on PMs (UPDATED) – The gold bears took control on 1/26 and slammed us down to $1780 on Friday before gold got a corrective bounce back to test $1800 going into the New Moon on Monday. There is a 3-star critical reversal day for gold on 2/1 that could be a high or a low. A symmetry correction in gold could take us down to $1725.

• Stocks – The SPX and NDX continued to rally on Monday and we are still playing the “massive short-covering rally” into the 2/1-2/3 New Moon Timing Window by holding a trading position in the SPY and FCX. Our Option Premium Ratio is giving us a massive “island reversal pattern” and is screaming at us to buy the SPY dips into the New Moon.
• Gold – The gold bears remain in control from last week and gold only managed a corrective bounce to $1800 as we approach the New Moon.  We have a 3-star critical-reversal-day coming in on 2/1 and that could be a high or a low. A symmetry correction in gold could take us down to $1725.
• Silver – Silver got slammed down to $22.15 on Friday and gave us just a corrective bounce to $22.55 into the New Moon.
• Bonds – Bonds have traced out and inverse head and shoulders pattern on the hourly chart that could work the 10-yr US rate lower. A slowing economy could sidetrack the Fed’s plan to tighten.
• Crude Oil – Crude oil is testing Friday’s high at $88.84 Monday night – we could see a test of $90 going into the 2/1-2/3 New Moon Timing Window.
• Dollar Index – The USD tested 97.44 on Friday, a 52-wk high, and then appears to have traced out an EW a-b-c correction.

TURNING POINT DAY

The turn window for this week is 2/1-2/3, which includes the New Moon Timing Window.

The Weekly JDV Market Timer - January 30, 2022

Folks,

Market Observations for the Week: Welcome to the Bear Market of 2022 – it is and currently will be a volatile affair. Chairman Powell has “tightened with words” so far and the 2-year US note has already gained 80 basis points to 1.20%. The first actual rate hike will come in March. The Fed is “far behind the curve” on inflation and its shift to tighten monetary policy will play havoc with the markets in 2022 and will give us a 20-yr cycle low in US markets in Q4 2022 or Q1 2023. We talked a lot about the 34-yr step out from the 1987 crash last fall and its ability to turn the markets down into a “real bear market”. Our bias is that it brought us a Bull Market Peak in the Russell 2000 (IWM) on 11/8 and a peak in the NYSE Composite (NYA) on 1/13, but peaks in the NDX and SPX have not yet been confirmed by an EW 5-wave down pattern on the daily chart. We had a 3-star Critical Reversal Window on 1/14-1/17 and that came in as a high on 1/13. Last week, we had a turn window on 1/27-1/28 and it gave us an EW 5-waves down in the IWM from the Jan 4 high, but not for the SPX or NDX. The VIX had a cycle high due on Friday – we could still see a final spike high early Monday! Be agile, cash is our largest position and our best asset in this volatile market. Our bias is, if we do get a gap down open on Monday, that we will see a SPX rebound rally into the 2/2 New Moon that could be strong. We have recommended 50% cash since Labor Day because of “black swan risks” to the stock market and we could put some of that cash to work on a “stink bid” basis if we see the VIX spike above 50 on Monday. Bitcoin is holding up over the weekend and a symmetry move could take us to 41000 by the 2/2 New Moon. Crude oil continues to hold up and could give us a spike higher to test $90 by the 2/2 New Moon. We remain in >50% cash because of the macro factors facing the global economy (Chinese credit contraction, rising global inflation, and rising global rates, new Covid variant, etc.) but we would put a small fraction of that cash to work on a “stink bid” basis with a VIX spike above 40. Once again, the gold bears took control last Wednesday and gold was slammed down into the FOMC minutes and continued down to undercut the important low at $1791 on Friday. The only ray of hope for the gold bulls was that the gold price managed a weekly close at $1792 – above the $1791 level. Rates could go either way early Monday – a move higher to test the 10-yr US rate at 1.87% could give us a VIX spike above 50 for the SPX but a move down in rates could spark a rally. The USD tagged 97.44 on Friday and gave us a divergent high to its SMI oscillator.

1/30/22 (Commentary for Sunday) We have a monster earnings week coming this week with AMZN, FB and GOOG reporting. Considering how the market rallied after the MSFT and AAPL earnings, we are not inclined to hold bearish positions going into this week. Also, the Option Premium Ratio is giving us a clear message this weekend – the reading from Friday was 2.94 and is testing the 5-yr high of 3.04 made on 3/24/20 – the bears have pushed this market down enough in the short term and we are inclined to buy the SPY on dips early Monday. Our short-term market bias has swung to BULLISH - if we get a down open early Monday, we are expecting a strong rally into the 2/2 New Moon. The mid-point of the current Mercury retrograde cycle fell on 1/24 and gave us the SPX low at 4222. The combination of Mercury retrograde, and Uranus retrograde has been a volatile brew for the market since 1/14, but markets can often reverse on the midpoint of Mercury retrograde and the SPX may have last week. We are still in the orb of the 34-yr step out from the 1987 crash and that time event has already put in confirmed bull market highs in the IWM and SMH but not yet in the SPX and NDX. The bears took control of gold last Wednesday and slammed it down below important support at $1791 on Friday. The only ray of hope for the gold bulls was that gold managed a weekly above $1791 support. We still hold >50% cash as we feel that the macro risks of being 100% long are just too great with the global credit contraction led by China still progressing and a now more hawkish FOMC targeting inflation. The US economy is highly levered to widespread speculation in stocks, stock options and digital currencies and trading profits may be difficult this year. In the US, the background monetary conditions have been deteriorating for months and (see the Closed End Fund (CEF) bond sector A/D line). Chairman Powell’s hawkish use of the “inflation word” in his press conference today did send rates higher into late Wednesday but rates pulled back into Friday. After increased tensions in Ukraine, the USD tagged 97.44 on Friday before correcting.

 

Big Picture on Stocks (UPDATED) – Our short-term market bias changed to BULLISH Friday as the IWM undercut its Monday low at 191.3 into the 1/27-1/28 turn window and our Option Premium Ratio indicator tested its 5-yr high– we prefer to hold cash over shorts and will buy the SPY on dips early Monday. We are holding about 70% cash in our trading accounts and would allocate money to “stink bids” in stocks in favored sectors if the VIX spikes to over 50 early Monday.

Big Picture on PMs (UPDATED) – Gold was slammed down last week after the spike to $1855 on Tuesday and undercut support at $1791 on Friday – the only ray of hope for gold bulls is that it managed a weekly close above $1791 support. There is a 3-star critical reversal day for gold on 2/1 and that is looking like a low.

• Stocks – The IWM traced out 5-waves down into the 1/27-1/28 turn window and the SPX reversed 140 points higher – one of the largest reversals in history. Our short-term market bias has swung to BULLISH and we are looking to buy dips early Monday on the SPY. Our Option Premium Ratio is testing 5-yr highs near 3.05 at the Covid low on 3/24/20 – our sentiment has swung back to bullish.
• Gold – After testing $1855 on Tuesday, gold got slammed down below $1791 on Friday  - we have a 3-star critical-reversal-day coming in on 2/1 and that looks to be a low.
• Silver – Silver got slammed down to $22.15 on Friday and looks bearish going into the 2/1 turn window.
• Bonds – Bonds gave us 5-waves up on the hourly chart going into Friday – the PMI report early Monday could have an impact on the 10-yr US rate.
• Crude Oil – Crude oil rallied to $88.84 on Friday on geo-political tensions from the Ukraine – we could see a test of $90 going into the 2/2 New Moon.
• Dollar Index – The USD tested 97.44 on Friday, a 52-wk high, and then started a small correction.

TURNING POINT DAY

The turn window for this week is 2/1-2/3, which includes the New Moon Timing Window.

The Daily JDV Market Timer - January 27, 2022

Folks,

Market Observations for the Week: The Russell 2000 is leading the SPX and NDX down and took out its Monday low today. Already down >20% from the 11/8 all-time high, the IWM is already in bear market territory. We could see the SPX and NDX take out their 1/24 lows on Friday/Monday, but we appear close to making an important low in the 1/27-1/28 turn window. It has been too early to buy stocks but some “stink bids” may work Friday/Monday if the VIX spikes above 50 - but we prefer cash over longs or shorts here  and our short-term market bias has turned to CAUTIOUS. Our bias was that the Monday low at SPX 4222.62 would be retested after the Fed FOMC/press conference on Wednesday and that could be a possibility for Friday/Monday. By the end of this week or early next, we are expecting at least an ICL (intermediate cycle low) for the SPX or perhaps a YCL (yearly cycle low) by 2/1 if the old bull market is still in force. We have recommended 50% cash since Labor Day because of “black swan risks” to the stock market and we could put some of that cash to work on a “stink bid” basis if we see the VIX spike above 50 on Friday/Monday. Bitcoin is holding above its Person’s Pivot at 36873 Thursday night, but its pattern looks shaky to us.  Crude oil rallied to $88.54 on Thursday and could extend higher with the Ukraine crisis heating up. We remain in >50% cash because of the macro factors facing the global economy (Chinese credit contraction, rising global inflation, and rising global rates, new Covid variant, etc.) but we could put a small fraction of that cash to work on a “stink bid” basis if the SPX enters a “panic phase” down into the 1/27-1/31 turn window with a VIX spike above 50. After popping to $1855 on Tuesday, gold was slammed down into the FOMC minutes and continued down to test the important low at $1791 Thursday morning – the break below $1820 turns us short-term bearish. Rates jumped early on the strong Q4 GDP estimate, but the 10-yr US rate settled back to 1.807 late in the session. The USD tested 52-week highs at 97.29 as geo-political tensions in the Ukraine continue to simmer.

1/27/22 (Commentary for Thursday) The Russell 2000 (IWM) took out its Monday low and continues to lead the SPY and QQQ down as we enter the 1/27-1/28 turn window. The SPY and QQQ rally patterns from Monday are also “corrective” looking and could undercut their respective lows on Friday, but AAPL is giving the QQQ a bounce overnight because of its post-earnings rally. The Tuesday after a monthly option expiration is a turning point day in our work and the 3-wave bounce in the SPY and QQQ from Monday’s lows into Wednesday looked corrective and could get undercut soon. However, many market measures are getting historically oversold here and managing risk is getting more difficult. Tuesday’s corrective bounce from Monday kept the stock market from getting too oversold in the short-term. The combination of Mercury retrograde, and Uranus retrograde has been a volatile brew for the market since 1/14. We are still in the orb of the 34-yr step out from the 1987 crash and that event argues for possible downside volatility into Monday, but we prefer cash over longs or shorts here. Our short-term market bias is CAUTIOUS as we entered the 1/27-1/28 turn window today and the IWM took out Monday’s low. After Friday/Monday, we are expecting a sharp rally in stocks into the 2/2 New Moon. After gold tested its overhead resistance at $1855 on Tuesday, it got slammed down to test support at $1791 and looks bearish – gold needs a follow through move higher in the GDX to keep it from really rolling over. The IWM took out Monday’s low at 191 today in our 1/27-1/28 turn window and is 20% before its all-time high on 11/8. We still hold >50% cash as we feel that the macro risks of being 100% long are just too great with the global credit contraction led by China still progressing and a now more hawkish FOMC targeting inflation and Fed balance sheet runoff. The US economy is highly levered to widespread speculation in stocks, stock options and digital currencies and trading profits may be difficult this year. In the US, the background monetary conditions have been deteriorating for months and (see the Closed End Fund (CEF) bond sector A/D line). Chairman Powell’s hawkish use of the “inflation word” in his press conference today did send rates higher into late Wednesday but rates pulled back on Thursday.  After increased tensions in Ukraine, the USD tested a 52-wk high at 97.29 today.

 

Big Picture on Stocks (UPDATED) – Our short-term market bias changed to CAUTIOUS today as the IWM undercut its Monday low at 191.3 into the 1/27-1/28 turn window – we prefer to hold cash over longs or shorts. We are holding about 70% cash in our trading accounts and plan to allocate money to “stink bids” in stocks to favored sectors if the VIX spikes to over 50 on Friday/Monday.

Big Picture on PMs (UPDATED) – Gold tested its overhead resistance at $1855 on Tuesday but then got slammed down to test $1791 on Thursday after the Fed Day - the gold bullion banks jumped all over gold Wednesday/Thursday. Gold looks bearish here and needs a reversal higher in the GDX to keep it from rolling over. There is a 3-star critical reversal day on 2/1.

• Stocks – The IWM undercut its Monday low at 191.3 as we entered the 1/27-1/28 turn window. We are turning cautious here and prefer to hold cash over longs and shorts. There is still a chance of a spike in the VIX above 50 on Friday/Monday and we will use this for a few “stink bids”.
• Gold – After testing $1855 on Tuesday, gold got slammed down to $1791 support on Thursday and looks bearish. 
• Silver – Silver got slammed down to $22.58 into Thursday and looks bearish.
• Bonds – After the 10-yr US rate tested  1.857% late Wednesday, we got a pullback on Thursday despite the larger than expected Q4 GDP report.
• Crude Oil – Crude oil rallied to $88.54 on geo-political tensions from the Ukraine and looks to go higher.
• Dollar Index – The USD tested 97.29 today, a 52-wk high.

TURNING POINT DAY

The turn window for this week is 1/26-1/28, which includes a Panic Cycle Low pattern.

The Daily JDV Market TImer - January 26, 2022

Folks,

Market Observations for the Week: Volatility is getting very predictable. We were surprised that traders bid up the QQQ and SPY before the FOMC minutes – it gave us an opportunity to add to our “put hedges”. After Powell started his press conference and focused on the inflation word in different contexts than “transitory”, the 10-yr US rate took off and the SPY and QQQ wilted. A test of SPX 4222, the Monday low, is in range for early Thursday which is in our 1/26-1/28 Panic Cycle Low Window. It is too early to buy stocks but some “stink bids” may work tomorrow if the VIX goes over 40. Our bias was that the Monday low at SPX 4222.62 would be retested after the Fed FOMC/press conference on Wednesday and that looks like a possibility – if 4222.62 gets taken out early, 4131 is another possible target. By the end of this week or early next, we are expecting at least an ICL (intermediate cycle low) for the SPX or perhaps a YCL (yearly cycle low) by 2/1 if the old bull market is still in force. We have recommended 50% cash since Labor Day because of “black swan risks” to the stock market and we expect to put some of that cash to work on a “stink bid” basis on more downside volatility on Thursday/Friday. Bitcoin is testing its S1 pivot support at 35581 and its Monday low at 32855 could be retested into the weekend.  Crude oil finished its 3-wave correction near $81 on Monday but rallied today to $87.95. We remain in >50% cash because of the macro factors facing the global economy (Chinese credit contraction, rising global inflation, and rising global rates, new Covid variant, etc.) but we plan to put some cash to work on a “stink bid” basis if the SPX enters a “panic phase” down into the 1/27-1/28 Panic low window. After popping to $1855 on Tuesday, gold was slammed down into the FOMC minutes and continued its decline into the close – the break below $1820 jeopardizes the short-term uptrend. Bonds got hit as the 10-yr US rate responded to Chairman Powell’s hawkishness and climbed to 1.857% The USD is testing its R1 pivot resistance overnight at 96.68.

1/26/22 (Commentary for Wednesday) Well, the SPY and QQQ fell hard during Chairman Powell’s press conference as the 10-yr US rate sounded hawkish on inflation and predicted a March rate hike. The Tuesday after a monthly option expiration is a turning point day in our work and the 3-wave bounce in the SPY and QQQ from Monday’s lows into Wednesday looked corrective and destined to get undercut. The E-mini futures are forecasting a gap-open down on Thursday’s open – we could see a low in the 1/27-1/28 turn window. Even though the market appears oversold by some measures, oscillators like the NYSE Summation Index could see much lower lows going into the weekend. Tuesday’s corrective bounce from Monday kept the stock market from getting too oversold in the short-term. The combination of Mercury retrograde, and Uranus retrograde has been a volatile brew for the market since 1/14. We are still in the orb of the 34-yr step out from the 1987 crash and that event argues for some possible extreme downside volatility late this week. Our short-term market bias is BEARISH here and we now want to see one more spike higher in the VIX before allocating some cash to well-researched “stink bids”  in our favored sectors –  oil stocks, natural gas stocks and uranium stocks. After this bloodbath phase is over, we are expecting a huge recovery in stocks very quickly into the 2/2 New Moon. After gold tested its overhead resistance at $1855 on Tuesday, gold got slammed to undercut its $1820 support line on Wednesday’s close – this is bearish. We made a Russell 2000 high on 11/8, in the orb of the 34-yr step out, and this could be a possible bull market high for the bull market from 2009-2021 – the IWM is testing Monday’s low at 191 and is officially 20% before it’s all-time high on 11/8. Bitcoin is rolling over bearishly and is testing its S! pivot support at 35581. Crude oil ended its EW a-b-c correction and rallied to $87.95 on Thursday as geo-political tensions from the Ukraine increase. We still hold >50% cash as we feel that the macro risks of being 100% long are just too great with the global credit contraction led by China still progressing and a now more hawkish FOMC targeting inflation and Fed balance sheet runoff – however, on a panic spike down into the 1/27-1/28 turn window, we will be pursuing “stink bids” on stocks in our favored sectors and perhaps in the QQQ. The US economy is highly levered to widespread speculation in stocks, stock options and digital currencies – a panic selloff in stocks could give the US economy a real shock – below SPX 4131 could be serious. After gold powered up to test overhead resistance at $1855 on Tuesday, several cycles slammed gold down below $1820 into the close which was short-term bearish. In the US, the background monetary conditions have been deteriorating for months and (see the Closed End Fund (CEF) bond sector A/D line). Chairman Powell’s hawkish use of the “inflation word” in his press conference today  did send rates higher and the QQQ down. After the spike in rates, the USD is testing 96.70 overnight Wednesday.

Big Picture on Stocks (UPDATED) – Our short-term market bias changed to VERY BEARISH on Wednesday and we could see EXTREME VOLATILITY in the SPX into 1/27-1/28. We are holding about 70% cash in our trading accounts and plan to allocate money to “stink bids” in stocks to favored sectors if the VIX spikes to over 50. We are looking for at least one more higher high in the VIX fear gauge.

Big Picture on PMs (UPDATED) – Gold powered higher to test its overhead resistance at $1855 on Tuesday but then got slammed down to undercut $1820 after the FOMC minutes on Wednesday which is bearish. The GDX needs to give us another follow through day higher to confirm the rally from 1/18.

• Stocks – The E-mini is testing Monday’s lows overnight Wednesday and we could see a gap-down open early Thursday. A test of 4222 is possible early – the next target is 4131.
• Gold – After testing $1855 on Tuesday, gold was slammed down below $1820 after the FOMC minutes which is short-term bearish.  We need a “follow through day” on the GDX higher to convince us that the PM rally from 1/18 is real. 
• Silver – Silver tagged $23.61 on Monday’s low – an undercut low is possible going into the Fed Day on 1/26.
• Bonds – Bonds corrected hard during Chairman Powell’s press conference and the 10-yr US rate spiked to 1.858%. 
• Crude Oil – Crude oil rallied to $87.95 on Wednesday on geo-political tensions from the Ukraine.
• Dollar Index – The USD is spiking overnight to test its R1 resistance pivot at 96.69.

TURNING POINT DAY

The turn window for this week is 1/26-1/28, which includes a Panic Cycle Low pattern.

The Daily JDV Market Timer - January 25, 2022

Folks,

Market Observations for the Week: We had another incredible volatility day on Tuesday in the market. Our bias is that the Monday low at SPX 4222.62 will be retested after the Fed FOMC/press conference on Wednesday – the 1/26-1/28 is a key turn window for a short-term low. The 3-star Critical Reversal Day for the SPX came in on 1/12, which looks like a Wave 2 high of a large C-Wave down which has more to go. Today we sold off our FCX calls that we added on a “stink bid” on Monday. By the end of this week or early next, we are expecting at least an ICL (intermediate cycle low) for the SPX and perhaps a YCL (yearly cycle low) by 2/1 if the bull market is still in force. We have recommended 50% cash since Labor Day because of “black swan risks” to the stock market and we expect to put some of that cash to work on a “stink bid” basis on more downside volatility after the Fed Day Wednesday. Bitcoin’s bounce looks corrective and its weekly lows could be retested into the weekend.  Crude oil gave us a 3-wave correction down to $81.9 on Monday but the rally back looks corrective, so we are expecting an undercut low to $81. We remain in >50% cash because of the macro factors facing the global economy (Chinese credit contraction, rising global inflation, and rising global rates, new Covid variant, etc.) but we plan to put some cash to work on a “stink bid” basis if the SPX enters a “panic phase” down around the 1/26 FOMC minutes release. Gold surprised us and broke higher to test overhead resistance at $1855 – a break below $1820 after the FOMC minutes would be concerning to the short-term uptrend. Bonds rallied in 5-waves higher on the hourly chart and is working through a 3-wave correction. The USD pulled back to 96 today.

1/25/22 (Commentary for Tuesday) Our bias is for a “bloodbath phase” this week in the stock market that could culminate in a mini-crash in the 1/26-1/31 time period after the Wednesday Fed Day. The Tuesday after a monthly option expiration is a turning point day in our work and the 3-wave bounce in the SPY and QQQ from Monday’s lows into Wednesday looks corrective. We are expecting more downside volatility after the 1/26 FOMC minutes/Powell press conference and a final low in the 1/27-1/31 window. Even though the market appears oversold by some measures, oscillators like the NYSE Summation Index could see much lower lows this week. Tuesday’s corrective bounce from Monday is keeping the stock market from getting too oversold in the short-term. The combination of Mercury retrograde, and Uranus retrograde has been a volatile brew for the market since 1/14. We are still in the orb of the 34-yr step out from the 1987 crash and that event argues for some possible extreme downside volatility late this week. Our short-term market bias is BEARISH here and we now want to see one more spike higher in the VIX before allocating some cash to well-researched “stink bids”  in our favored sectors – gold stocks, oil stocks, natural gas stocks and uranium stocks. After this bloodbath phase, we are expecting a huge recovery in stocks very quickly into the 2/2 New Moon. Gold busted higher to test overhead resistance at $1855 – we could still see a leg down after the FOMC minutes on tomorrow’s Fed Day. Any reversal down in the GDX could give an opportunity for “stink bids” on NEM and SBSW. We made a Russell 2000 high on 11/8, in the orb of the 34-yr step out, and this could be a possible bull market high for the bull market from 2009 – more downside is expected this week after the FOMC minutes are scrutinized tomorrow. Bitcoin tested its R1 resistance at 37370 Tuesday evening and its own rally from Monday looks corrective. Crude oil spiked higher to $87.10 last Thursday before plunging to $$81.9 on Monday – a symmetry EW a-b-c correction could take us back to the $81 area. We still hold >50% cash as we feel that the macro risks of being 100% long are just too great with the global credit contraction led by China still progressing and a now more hawkish FOMC targeting inflation and Fed balance sheet runoff – however, on a panic spike down after the Fed Day, we will be pursuing “stink bids” on stocks in our favored sectors and perhaps in the QQQ. The US economy is highly levered to widespread speculation in stocks, stock options and digital currencies – a panic selloff in stocks could give the US economy a real shock – below SPX 4131 could be serious. Gold powered up to test overhead resistance at $1855 – several cycles point downed for gold and gold stocks into 1/25-1/26 – how gold trades after the FOMC minutes will be key. In the US, the background monetary conditions have been deteriorating for months and (see the Closed End Fund (CEF) bond sector A/D line). The Fed quickened the reduction of financial liquidity from the US stock market at the December Fed meeting despite slowing global growth concerns - continued hawkish comments in this week’s Fed minutes would ruffle some market feathers. The USD pulled back to 96 late Tuesday.

Big Picture on Stocks (UPDATED) – Our short-term market bias changed to VERY BEARISH on Friday and we are looking for a “bloodbath week” in the SPX - EXTREME VOLATILITY between 1/24-1/31 is a possibility. We are holding about 70% cash in our trading accounts and plan to allocate money to “stink bids” in stocks to favored sectors. We are looking for at least one higher high in the VIX fear gauge.

Big Picture on PMs (UPDATED) – Gold powered higher to test its overhead resistance at $1855 but how we trade after the FOMC minutes is key. The GDX needs to give us another follow through day higher to confirm the rally from 1/18.

• Stocks – Our bias is that the SPY is only giving us a 3-wave corrective bounce into Wednesday and we are looking for more downside volatility after the FOMC minutes. We are using our 70% cash for “stink bids” in our favored sectors this week.
• Gold – Gold rallied and tested its overhead resistance at $1855, but how we trade after the FOMC minutes is key.  We need a “follow through day” on the GDX higher to convince us that the PM rally from 1/18 is real. 
• Silver – Silver tagged $23.61 on Monday’s low – an undercut low is possible going into the Fed Day on 1/26.
• Bonds – Bonds rallied in 5-waves on the hourly chart into Monday before correcting. 
• Crude Oil – Crude oil spiked to $87.10 on Thursday and is pulling back to a symmetry target of $81.
• Dollar Index – The USD corrected today and tested 96.

TURNING POINT DAY

The turn window for this week is 1/26-1/28, which includes a Panic Cycle Low pattern.

The Daily JDV Market Timer - January 24, 2022

Folks,

Market Observations for the Week: Hold on to your stomachs, we are entering a “bloodbath week” for the stock market and Monday is only the opening act – we are expecting a lower divergent low for the SPX by 1/27-1/28. The 3-star Critical Reversal Day for the SPX came in on 1/12, which looks like a Wave 2 high of a large C-Wave down which has more to go. As the fear gauge VIX ripped higher to test 39, we sold all of our UVXY but only opened a small, long position. By the end of this week or early next, we are expecting at least an ICL (intermediate cycle low) for the SPX and perhaps a YCL (yearly cycle low) by 2/1. We have recommended 50% cash since Labor Day because of “black swan risks” to the stock market and we expect to put some of that cash to work on a “stink bid” basis during this week. Bitcoin’s reversal higher from its S2 support pivot cheered the market and telegraphed a reversal higher by the QQQ into the close.  Crude oil gave us a 3-wave correction down to $81.9 on Monday but the rally back looked corrective, so we are expecting an undercut low. We remain in 50% cash because of the macro factors facing the global economy (Chinese credit contraction, rising global inflation, and rising global rates, new Covid variant, etc.) but we plan to put some cash to work on a “stink bid” basis if the SPX enters a “panic phase” down around the 1/26 FOMC minutes release. For gold, several cycles point to weakness into 1/26 – a break below $1820 would be concerning to the short-term uptrend. Bonds rallied in 5-waves higher on the hourly chart and started a pullback late today. The USD rallied to a multi-week high today to its R1 resistance pivot at 96.11 – geo-political concerns in the Ukraine gave it a boost.

1/24/22 (Commentary for Monday) We are looking for a “bloodbath phase” this week in the stock market that could culminate in a mini-crash in the 1/26-1/31 time period after the Wednesday Fed Day and today was just the first phase. We are expecting more volatility into the 1/26 FOMC minutes and the Powell press conference before another a final low on 1/27-1/31. Even though the market appears oversold by some measures, oscillators like the NYSE Summation Index could see much lower lows this week. Today’s late short-covering rally is keeping the stock market from getting too oversold in the short-term. The combination of Mercury retrograde, and Uranus retrograde has been a volatile brew for the market since 1/14. We are still in the orb of the 34-yr step out from the 1987 crash and that event argues for some possible extreme downside volatility late this week. Our short-term market bias is BEARISH here and we now want to see one more spike higher in the VIX before allocating some cash to well-researched stink bids in our favored sectors – gold stocks, oil stocks, natural gas stocks and uranium stocks. After this bloodbath phase, we are expecting a huge recovery in stocks very quickly. Gold gave us a B-Wave test of last week’s high at $1848.5 – we could see a C-Wave down into the 1/26 Fed Day. We have some negative cycles for gold and gold stocks early this week and could see an opportunity for “stink bids” on NEM and SBSW on Tues/Wed. We made a Russell 2000 high on 11/8, in the orb of the 34-yr step out, and this could be a possible bull market high – more downside is expected this week after today’s short-covering rally into the close. Bitcoin reversed higher after testing its S2 support pivot at 32808 and telegraphed that the NDX was about to reverse higher. Crude oil spiked higher to $87.10 on Thursday before plunging to $$81.9 Monday – a symmetry EW a-b-c correction could take us back to the $81 area. We still hold 50% cash as we feel that the macro risks of being 100% long are just too great with the global credit contraction led by China still progressing and a now more hawkish FOMC targeting inflation and Fed balance sheet runoff – however, on a panic spike down after the Fed Day, we will be pursuing stink bids on stocks in our favored sectors and perhaps in the QQQ. The US economy is highly levered to widespread speculation in stocks, stock options and digital currencies – a panic selloff in stocks could give the US economy a real shock – below SPX 4131 could be serious . On Monday, gold gave us a B-Wave test of $1848.5 – several cycles point down for gold and gold stocks into 1/25-1/26. In the US, the background monetary conditions have been deteriorating for months and (see the Closed End Fund (CEF) bond sector A/D line). The Fed quickened the reduction of financial liquidity from the US stock market at the December Fed meeting despite slowing global growth concerns - continued hawkish comments in this week’s Fed minutes would ruffle some market feathers. Geo-political tensions boosted the USD to 96.13 before a correction.

Big Picture on Stocks (UPDATED) – Our short-term market bias changed to VERY BEARISH on Friday and we are looking for a “bloodbath week” in the SPX - EXTREME VOLATILITY between 1/24-1/31 is a possibility. We are holding about 70% cash in our trading accounts and plan to allocate money to “stink bids” in stocks to favored sectors. We are looking for a “panic move” in our fear gauges like the VIX and TRIN.

Big Picture on PMs (UPDATED) – Gold gave us a B-Wave test of last week’s high at $1848.5 – we see more down pressure from various cycles from Tuesday into the Fed Day on 1/26. The GDX needs to give us another follow through day higher to confirm the rally from 1/18.

• Stocks – We got a volatility spike today that tested 39 but the SPX lows for the week may come after the 1/26 Fed Day. We are using our 70% cash for “stink bids” in our favored sectors this week.
• Gold – Gold gave us a B-Wave test of the $1848.5 high on Monday, but several cycles look to pressure gold down into 1/25-1/26.  We need a “follow through day” on the GDX higher to convince us that the PM rally from 1/18 is real. 
• Silver – Silver tagged $23.61 on Monday’s low – an undercut low is possible going into the Fed Day on 1/26.
• Bonds – Bonds rallied in 5-waves on the hourly chart into Monday before correcting. 
• Crude Oil – Crude oil spiked to $87.10 on Thursday and is pulling back to a symmetry target of $81.
• Dollar Index – Geo-political tensions in the Ukraine rallied the USD to 96.13 on Monday.

TURNING POINT DAY

The turn window for this week is 1/26-1/28, which includes a Panic Cycle Low pattern.

The Weekly JDV Market Timer - January 23, 2022

Folks,

Market Observations for the Week: Hold on to your stomachs, we are entering a “bloodbath week” for the stock market. The 3-star Critical Reversal Day for the SPX came in on 1/12, which looks like a Wave 2 high of a large C-Wave down. We ended last week with mostly cash in our trading account and some UVXY to hedge our stocks. By the end of next week, we are expecting at least an ICL (intermediate cycle low) for the SPX and perhaps a YCL (yearly cycle low) no later than 1/31. We have recommended 50% cash since Labor Day because of “black swan risks” to the stock market and we expect to put some of that cash to work on a “stink bid” basis at some point this week. Bitcoin tends to lead the NDX, so its breakdown to 36150 is predicting a rough ride down for tech stocks on Monday.  Crude oil made a new yearly high at $87.1 and then impulsively declined to $82.69 Thursday evening before bouncing to $85.51 on Friday – we could see another leg down start on Monday. We remain in 50% cash because of the macro factors facing the global economy (Chinese credit contraction, rising global inflation, and rising global rates, new Covid variant, etc.) but we plan to put some cash to work on a “stink bid” basis if the SPX enters a “panic phase” down around the 1/26 FOMC minutes release. Gold made an important low on 1/18 and then rallied up in 5-waves to test $1848.5 on Thursday before correcting – several cycles point to weakness into 1/26 – a break below $1820 would be concerning to the short-term uptrend. Bonds rallied Friday as the 10-yr US rate continued its correction to 1.752%. The USD gave us 5-waves down into early Friday before a bounce to 95.63 – a C-Wave down early Monday looks possible. Be aware that a Russian invasion of the Ukraine is possible this week.

1/23/22 (Commentary for Sunday) We are looking for a “bloodbath phase” this week in the stock market that could culminate in a mini-crash in the 1/26-1/31 time period. Even though the market appears oversold by some measures, oscillators like the NYSE Summation Index could see much lower lows this week. We are still in the orb of the 34-yr step out from the 1987 crash and that event argues for some possible extreme downside volatility this week. Our short-term market bias has turned to BEARISH here and we now want to see spikes in our fear indicators (VIX, TRIN, etc.) before allocating our 50% cash to some stink bids in our favored sectors – gold stocks, oil stocks, natural gas stocks and uranium stocks. After this bloodbath phase, we are expecting a huge recovery in stocks very quickly. The PM sector bottomed on 1/18 and the GDX gave us a monster 7% rally on Wednesday before consolidating into the weekend – we need to see a follow through day higher in the GDX to convince us that the PM rally has legs. We have some negative cycles for gold and gold stocks early this week and could see an opportunity for “stink bids” on NEM and SBSW on Tues/Wed. We made a Russell 2000 high on 11/8, in the orb of the 34-yr step out, and this could be a possible bull market high – more downside is expected this week. Bitcoin took out its 1/10 low on Thursday and is testing 36150 over the weekend – it is now forecasting more bloodshed for the SPX and NDX this week. Crude oil spiked higher to $87.10 on Thursday before plunging to $82.69 Thursday evening – a symmetry EW a-b-c correction could take us back to the $81 area. We still hold 50% cash as we feel that the macro risks of being 100% long are just too great with the global credit contraction led by China still progressing and a now more hawkish FOMC targeting inflation and Fed balance sheet runoff – however, on a panic spike down this week, we will be pursuing stink bids on stocks in our favored sectors and perhaps in the QQQ. The US economy is highly levered to widespread speculation in stocks, stock options and digital currencies – a panic selloff in stocks could give the US economy a real shock. On Thursday, gold finished an EW 5-wave rally to $1848.5 and started a correction – several cycles point down for gold and gold stocks into 1/25-1/26. In the US, the background monetary conditions have been deteriorating for months and (see the Closed End Fund (CEF) bond sector A/D line). The Fed quickened the reduction of financial liquidity from the US stock market at the December Fed meeting despite slowing global growth concerns and more hawkish comments from the incoming FOMC board would ruffle some market feathers. The USD bounced to 95.86 on Thursday and started an EW a-b-c correction with a symmetry target near its S2 pivot support at 95.31.

Big Picture on Stocks (UPDATED) – Our short-term market bias changed to VERY BEARISH on Friday and we are looking for a “bloodbath week” in the SPX and a mini-crash between 1/24-1/31 is a possibility. We are holding about 70% cash in our trading accounts and plan to allocate money to “stink bids” in stocks in favored sectors. We are looking for a “panic move” in our fear gauges like the VIX and TRIN.

Big Picture on PMs (UPDATED) – Gold rallied in an EW 5-waves from its low on 1/18 and tested $1848.5 on Thursday before correcting into the weekend – we see more down pressure from various cycles from Sunday to the Fed Day on 1/26. The GDX needs to give us another follow through day higher to confirm the rally from 1/18.

• Stocks – Our short-term bias turned to VERY BEARISH on Friday and we need to see a volatility spike higher in the VIX this week before we look for a long trade. We are using our 70% cash for “stink bids” in our favored sectors this week.
• Gold – Gold tested $1848.5 on Thursday before a correction into the weekend. Several cycles look to pressure gold down into 1/25-1/26.  We need a “follow through day” on the GDX higher to convince us that the PM rally from 1/18 is real. 
• Silver – Silver tested $24.75 on Thursday before pulling back in an EW a-b-c correction into  its S1 support pivot late Friday.
• Bonds – Bonds continued higher on Friday as the SPX continues to get sold.  The 10-yr US rate closed at 1.751% on Friday. 
• Crude Oil – Crude oil spiked to $87.10 Thursday and we are now looking for a symmetry EW a-b-c correction back to $81.
• Dollar Index – Looking for a symmetry EW a-b-c correction back to 95.31 on Monday.

TURNING POINT DAY

The turn window for this week is 1/26-1/28, which includes a Panic Cycle Low pattern.

The Daily JDV Market Timer - January 20, 2022

Folks,

Market Observations for the Week: After an early corrective bounce, the SPX sold off late and took out the 12/20 low which argues for a failed daily cycle low and perhaps more market ugliness on Friday/Monday. The QQQ did not give us the undercut low setup that we desired early Thursday so we were flat on tech stocks. The SPX 1/14-1/17 3-star critical reversal turn window could be interpreted as a HIGH on 1/12 and that could bring more selling on Friday/Monday.  Bitcoin took out its 1/10 low and is testing 39000 – this will not bring cheer to the QQQ early Friday. Crude oil made a new yearly high at $87.1 and then impulsively declined to $82.69 overnight. We remain in 50% cash because of the macro factors facing the global economy (Chinese credit contraction, rising global inflation, and rising global rates, new Covid variant, etc.) and now a more hawkish FOMC that wants to rein in inflation and unwind the Fed balance sheet more aggressively than the market was hoping for. Gold made an important low on 1/18 and then rallied up in 5-waves to test $1848.5 on Thursday before correcting. Can gold hold up on Friday in a stock market selloff? Bonds rallied Thursday as the 10-yr US rate continued its correction to 1.833%. The USD made highs for the week Thursday night by bouncing to 95.86 – the USD continues to be attracted to the 96 level.

1/20/22 (Commentary for Thursday) The SPX took out its 12/20 low and created a failed daily cycle low which is bearish. Led by NFLX, the NDX declined hard into the close and could have given us 5-waves down from 1/12 and the possible end of an EW a-b-c correction from 11/22 – but how we trade on Friday needs to confirm this. Our short-term market bias has turned to cautious here and we now want to see a confirmed DCL (daily cycle low) before pursuing a long trade. The PM sector bottomed on 1/18 and the GDX gave us a monster 7% rally on Wednesday before consolidating on Thursday – we need to see a follow through day higher in the GDX on Friday to convince us that the rally is real. We are currently holding NEM and looking for a move to $75. Remember, we are still in the orb of the 34-year step out from crash of 1987 and the Russell 2000 high of 11/8 could have been a significant high – so more down is possible if the stock market can’t establish a low on Friday. Bitcoin took out its 1/10 low and is testing 39000 overnight – it is now confirming the bearish action of the SPX and NDX. Crude oil spiked higher to $87.10 on Thursday before plunging to $82.69 and could have put in a short-term high. We still hold 50% cash as we feel that the macro risks of being 100% long are just too great with the global credit contraction led by China still progressing and a now more hawkish FOMC targeting inflation and Fed balance sheet runoff. The US economy is highly levered to widespread speculation in stocks, stock options and digital currencies and Bitcoin trading profits may be hard to come by in 2022. On Thursday, gold finished an EW 5-wave rally to $1848.5 and started a correction – we need the GDX to close strong on Friday to convince us that the PM sector rally is real. In the US, the background monetary conditions have been deteriorating for months and the Fed quickened the reduction of financial liquidity from the US stock market at the December Fed meeting despite slowing global growth concerns. Bonds bounced correctively Thursday and the 10-yr US rate may be poised to test the 1.866 high. The USD bounced to 95.86 on Thursday and continues to hold up despite all the bearish analysts.

Big Picture on Stocks (UPDATED) – Our short-term market bias changed to “cautious” Thursday until we see a “confirmed” DCL (daily cycle low) – if the SPX closes down hard on Friday, we could see a mini-crash on Monday.

Big Picture on PMs (UPDATED) – Gold rallied in an EW 5-waves from its low on 1/18 and tested $1848.5 on Thursday before correcting. The GDX needs to close strong on Friday to convince us that the rally from 1/18 is real.

• Stocks – Our short-term bias turned to cautious on Thursday and we need to see a confirmed SPX DCL (daily cycle low) before we look for a long trade. How we trade on Friday is crucial – another weak close could risk a mini-crash on Monday.
• Gold – Gold made an important low at $1805 on Wednesday and rallied in 5-waves to $1848.5 on Thursday before correcting.  We need to see the GDX close strong on Friday to convince us that the PM rally from 1/18 is real.  
• Silver – Silver tested $24.75 on Thursday before pulling back to test its Person’s pivot at $24.46 overnight.
• Bonds – Bonds appeared to bounce correctively on Thursday and that could mean a retest of the 10-yr US rate at 1.866% soon.  
• Crude Oil – Crude oil spiked to $87.10 Thursday and pulled back to the test the S2 pivot at $82.41 overnight before a bounce.
• Dollar Index – The USD bounced back to test 95.86 overnight Thursday.

TURNING POINT DAY

The turn window for this week is 1/16-1/18, which is the Full Moon Timing Window.

The Daily JDV Market Timer - January 19, 2022

Folks,

Market Observations for the Week: The SPX and the NDX have both taken out the 1/10 lows but the pattern of the QQQ looks close to a completion. One more undercut low below QQQ 365.54 early Thursday would give us 5-waves down from 1/12 and perhaps the end of an EW a-b-c correction from 11/22. The 1/14-1/18 turn window is a 3-star critical reversal window that has already turned gold/silver higher on 1/18 and the USD lower – it may also try to turn the SPY/QQQ higher for a final run into late January. We remain in 50% cash because of the macro factors facing the global economy (Chinese credit contraction, rising global inflation, and rising global rates, new Covid variant, etc.) and now a more hawkish FOMC that wants to rein in inflation and unwind the Fed balance sheet more aggressively than the market anticipated. Gold and silver made important lows on 1/18 and gold took out the critical $1834 level today to reconfirm its uptrend after silver took out its $23.48.  We could now see a quick move up to the $1880 high for gold and $25.50 for silver. Bonds rallied Wednesday and the 10-yr US rate corrected after rallying in 5-waves higher on the daily chart to 1.866%. The USD rolled over today and tested 95.44 which helped support the big move in the PM sector.

1/19/22 (Commentary for Wednesday) The NDX and SPX both took out their 1/10 lows and we may be approaching a pattern completion in the QQQ. One more undercut low below 365.54 early Thursday, would  give us 5-waves down from 1/12 and the possible end of an EW a-b-c correction from 11/22. So, our short-term market bias is turning to bullish early Thursday if the QQQ and SPY give us undercut lows in the morning. The PM sector bottomed on 1/18 and we could see a broad market low at 1/20. We favored gold stocks today on the 7% rise in the GDX – we are holding NEM and are looking for a move to $75. Remember, we are still in the orb of the 34-year step out from crash of 1987 and the Russell 2000 high of 11/8 could have been a significant high – even so, the QQQ and SPY could be setting up for one final run up. Bitcoin continues to coil sideways and is hugging its Person’s pivot at 41820 overnight – it is showing bullish divergence to the SPY and QQQ by keeping above its 1/10 low. Our current bias is that the QQQ needs to undercut it’s low at 365.54 to finish 5-waves down and the possible completion of an EW a-b-c correction from 11/22 into 1/20. Crude oil spiked higher to $86.79 and could be putting in a short-term high. We still hold 50% cash as we feel that the macro risks of being 100% long are just too great with the global credit contraction led by China still progressing and a now more hawkish FOMC targeting inflation and Fed balance sheet runoff. The US economy is highly levered to widespread speculation in stocks, stock options and digital currencies and Bitcoin trading profits may be hard to come by in 2022. On its solar/lunar Big Range Day today, gold screamed higher and broke above $1834 to confirm its uptrend. Clearly, gold and silver made an important low on 1/18 which was in the 1/16-1/18 Full Moon Timing Window and on the 34-day Fibonacci step out from 12/15. In the US, the background monetary conditions have been deteriorating for months and the Fed quickened the reduction of financial liquidity from the US stock market at the December Fed meeting despite slowing global growth concerns. Bonds rallied today and the 10-yr US rate sub-divided down to 1.821%. The USD pulled back to 95.44 which supported the PM sector.

Big Picture on Stocks (UPDATED) – Our short-term market bias changed to bullish late Wednesday on the possibility that one more undercut low early Thursday in the QQQ could end the EW a-b-c correction from 11/22.

Big Picture on PMs (UPDATED) – On gold’s Big Range Day today gold blasted above $1834 resistance and confirmed its uptrend.  Gold stocks bullishly led the way higher today.

• Stocks – An undercut low below QQQ 365.54 early Thursday would be a short-term QQQ buy signal for a final run up into next week’s 1/26-1/28 turn window.
• Gold – Gold made an important low at $1805 on Wednesday and today we blasted above $1834 resistance to confirm its uptrend.  
• Silver – Silver continued to climb in a 3^rd wave higher and looks to target $25.
• Bonds – Bonds rallied hard on Wednesday as the 10-yr US rate dropped to1.821%.  
• Crude Oil – Crude oil spiked to $86.79 today and may have formed a short-term top.
• Dollar Index – The USD pulled back today as rates slid and tested 95.44.

TURNING POINT DAY

The turn window for this week is 1/16-1/18, which is the Full Moon Timing Window.

The Daily JDV Market Timer - January 18, 2022

Folks,

Market Observations for the Week: The negative close for the SPX on Friday turned our short-term market bias to bearish and the rise in the 10-yr US rate to 1.866% on Monday dropped the SPX like a stone below Friday’s lows. The only positive sector today was the energy sector (XLE) as crude oil spiked to $86.37, an eight-year high, in the 1/16-1/18 Full Moon Timing Window. How the SPX rallies on Wednesday will tell us about the overall pattern that we are in. We remain in 50% cash because of the macro factors facing the global economy (Chinese credit contraction, rising global inflation, and rising global rates, new Covid variant, etc.) and now a more hawkish FOMC that wants to rein in inflation and unwind the Fed balance sheet more aggressively than the market anticipated. On its solar/lunar Big Range Day, gold tested $1805 around 8:30 AM EDT and then rallied quickly to test its Person’s Pivot at $1819. Silver was more impressive as it took out its $23.48 high on a daily close – how we trade in gold and silver on Wednesday is key to the short-term trend. We were wrong about a short-term pullback in the 10-yr US rate - the 10-yr US rate rallied to test a 52-wk high of 1.866% on Tuesday and that pressured stocks. With rates rising, the USD climbed to 95.71 and pressured gold late in the session.

1/18/22 (Commentary for Tuesday) The Empire state manufacturing index came in weaker than expected, but the 10-yr US rate rallied hard up to 1.866, a 52-wk high, and the SPX got sold hard – even the bank stocks. Crude oil did spike to $86.37 and kept the energy sector (XLE) positive on the close. The SPX may be close to some kind of low, but we are going to let the market action early Wednesday tell us where we are at. Several of our short-term indicators have turned bearish on Friday and that has turned us very cautious. We sold out of our FCX position on its early rally to $46.2 and kept that money in cash. The important 1/26-1/28 turn window lies ahead of us and it could still be either an important SPX HIGH or LOW. Remember, we are still in the orb of the 34-year step out from crash of 1987 and the Russell 2000 high of 11/8 could have been a significant high. The 10-yr US rate did not spike last fall as we anticipated because the Chinese led global credit contraction kept the USD high and the US long bonds well bid – but that could be changing as the 10-yr US rate launched to 52-wk highs today on weak US economic news. Bitcoin bounced above it Person’s pivot overnight at 42264 and may be hinting at an SPX rally attempt early Wednesday. Our bias was that the QQQ finished an EW a-b-c correction from 11/22 into 1/10 but taking out the 1/10 low at 369.31 will negate that idea. The “bull-hammer candlestick” on the SPY that we got on 1/10 only gave us a two day corrective rally, and the EW pattern down from Wednesday continued to sub-divide down into today. Crude oil spiked higher to $86.41 into the 1/16-1/18 Full Moon Timing Window and is still holding up Tuesday night. We still hold 50% cash as we feel that the macro risks of being 100% long are just too great with the global credit contraction led by China still progressing and a now more hawkish FOMC targeting inflation and Fed balance sheet runoff. The US economy is highly-levered to widespread speculation in stocks, stock options and digital currencies and Bitcoin trading profits may be hard to come by in 2022. On its solar/lunar Big Range Day today, gold tested $1805 early before running up to its Person’s pivot at $1819 in the morning – gold pulled back into the 1/16-1/18 Full Moon Timing Window and the 34-day Fibonacci step out from 12/15 and may have made a low today, but how we trade on Wednesday is key. In the US, the background monetary conditions have been deteriorating for months and the Fed quickened the reduction of financial liquidity from the US stock market at the December Fed meeting despite slowing global growth concerns. Bonds got hit this morning, and the 10-yr US rate made a 52-week high at 1.866% on Tuesday. The USD tested 94.63 early Friday and then bounced back to test 95.71 on Monday which pressured gold.

Big Picture on Stocks (UPDATED) – Our short-term bias changed to cautious late Friday on the short-covering close on the SPX and taking out Friday’s low this morning turned us bearish. The QQQ may have finished an EW a-b-c correction from the 11/22 high into 1/10 and held up reasonably well considering the move higher in US rates. Taking out the 1/10 QQQ low at 369.17, however, would be bearish.

Big Picture on PMs (UPDATED) – On gold’s Big Range Day today gold pulled back to test $1805 early, before a run higher to $1819.  Gold needs a close above $1835 to continue its uptrend.

• Stocks – The 10-yr US rate rallied to 1.866% and that pounded the SPX below its 1/10 low which turned our short-term market bias to bearish - we sold our FCX near its high for the day and kept it in cash. How we trade early Wednesday will illuminate the pattern for us.
• Gold – On its solar/lunar Big Range Day, gold tested $1805 and may have made a low in the 1/16-1/18 Full Moon Timing Window and the 34-day Fibonacci step out from 12/15 – how we trade early Wednesday will be key. Gold needs to close above $1835 to resume its uptrend.
• Silver – Silver tested $22.84 early Tuesday and then launched to close the day above $23.48 which got the bulls running – silver may have confirmed its uptrend.
• Bonds – Bonds sold off on Tuesday as the 10-yr US rate climbed to 1.866%.  
• Crude Oil – Crude oil spiked into the 1/16-1/18 Full Moon Timing Window and tested $86.41 late Tuesday as the hot XLE tested 65.50.
• Dollar Index – As the 10-yr US rate rallied to 1.866% on Tuesday, the USD climbed higher to test 95.71.

TURNING POINT DAY

The turn window for this week is 1/16-1/18, which is the Full Moon Timing Window.