Folks,
Market Observations for the Week: The SPX corrected on Tuesday as the Russian convoy approached the outskirts of Kyiv. Tomorrow at 10:00 PM EDT, Chairman Powell will speak and any indication of less than a 0.50% rate hike for March will be received bullishly by the market. The SPX should continue to trade on Ukrainian war fortunes and hopes for a favorable diplomatic solution but the ADP jobs report early Wednesday and the NFP jobs report on Friday will be important looks at the strength of the US economy. From our latest EW point of view, the E-mini rallied in 5-waves from early Thursday into Friday’s close and corrected that “impulse wave” into Tuesday. We saw the SPX make a B-Wave test of the 1/24 low at 4280 today and we may have started a C-Wave higher to test 4595. Bitcoin tested its R2 resistance pivot at 45110 on Tuesday and is correcting sideways. After just a 3-wave pullback into Friday, crude oil exploded today to test $107.74 Tuesday evening as we approach the 3/2-3/3 New Moon Timing System. Gold rallied to test $1952 as it trends higher into the 3/2 New Moon. We added a few shares of AAPL and MSFT today on the NDX pullback into the close. We also have a 20% allocation to gold/silver/platinum in various forms and we added some shares of SLV near the open today. The USD has been trending sideways this week and continues to hold above its Person’s Pivot at 97.20.
3/01/22 (Commentary for Tuesday) The SPX did finally give us a pullback to 4280 in the afternoon and we did add a few shares of AAPL and MSFT for a trade. The Option Premium Ratio pulled back to 1.08 today and looks bullish for tomorrow. Chairman Powell’s commentary at 10:00 PM on Wednesday should be market moving. We are holding ~80% cash here and ~ 20% in physical gold/silver/platinum and PM equities – our favorite PM equity is SBSW, a platinum stock. Bitcoin tested its R2 resistance pivot at 45110 on Tuesday and then went sideways – this is bullish for the SPX. After a 3-wave correction into Friday, crude oil is spiking into the 3/2 New Moon and is testing $107.74 Tuesday evening. Gold is also ramping higher into the 3/2 New Moon and looks to test the $1976 high from last week tomorrow. Overall, we hold ~80% cash and 20% in gold/silver/platinum in various forms and believe that the SPX confirmed a bear market after taking out the 1/24 SPX low at 4222 last week. We like holding mainly cash as the macro risks of being 100% long are just too high with the global credit contraction led by China still progressing and a 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) and the Fed’s tightening will accelerate this. The US bond spiked higher to test 159’22 today as the SPK corrected on reports of a massive Russian convoy converging on Kyiv. The USD bounced back to tag 97.6 Tuesday evening.
Big Picture on Stocks (UPDATED) – Taking out SPX 4222 last week confirmed a bear market in our work. The NDX gave us a 5% turn-around day on 2/24 which only happened before in bear markets. We are holding about 80% cash in our stock accounts and ~20% in gold/silver/platinum in various forms. We may have seen a trading low at SPX 4280 today, the 55-day Fibonacci step out from the Jan 4 high.
Big Picture on PMs (UPDATED) – Gold ramped up to $1952 today as it spikes into the 3/2 New Moon. A close above $1960 is needed to confirm that a major rally is underway.
- Stocks – The SPX pulled back to our target of 4280 today on the 55-day Fibonacci step out from Jan 4 and into the New Moon Timing Window. We are holding ~80% cash but added a few AAPL and MSFT shares on today’s late pullback.
- Gold – Gold is spiking into the Wednesday New Moon and tested $1952 today. A close above $1960 is needed to confirm a substantial rally higher is underway. We still hold about 20% in PM assets.
- Silver – Silver also spiked higher today into the New Moon Window and tested $25.56 – we added a few trading shares of SLV early this morning.
- Bonds – Bonds spiked to 159’22 Tuesday as a massive Russian convoy converged on Kyiv.
- Crude Oil – Crude oil only pulled back in 3-waves on Friday but then ramped to test $109.29 Tuesday evening as we enter the New Moon Timing Window.
- Dollar Index – The USD continues to hold up above its Person’s Pivot Tuesday night at 97.41.
TURNING POINT DAY
The turn windows for this week are 3/2-3/3, the New Moon Timing Window, and 3/4, the NFP jobs report.
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