Folks,
Market Observations for the Week: The SPX held important support at 4280 late Tuesday and with the finesse of Chairman Powell in front of Congress early Wednesday and his preference of just a 0.25% rate hike at the March meeting, the SPX gave us a nice rally day that tested 4401.48 before a pullback into the close. We are now at an import decision point in the market - - if we are in a Leading Diagonal Down pattern in the SPX from 1/4/22, as many analysts favor here, then the SPX should go no higher than 4430 early Thursday before a sharp correction down. A SPX break above 4480 would invalidate the Leading Diagonal down pattern and argue for a retracement to 4600. The SPX should continue to trade on Ukrainian war fortunes and hopes for a favorable diplomatic solution but the NFP jobs report on Friday will be an important take at on the US labor market. Bitcoin trades with the lunar cycle and ramped up to test 45435 on today’s New Moon before correcting. Crude oil exploded again today to test $114.7 on today’s New Moon – a two-day close above $115 could give us a quick test of the all-time high in 2008 at $147. Gold double-tested $1952 early Wednesday and may be pulling back to test $1900 again as the computers are programmed to sell gold into Friday’s NFP report. We sold our trading shares of MSFT and APPL today on the strong close. We also have a 20% allocation to gold/silver/platinum in various forms and we sold some shares of SLV near the open today. The USD continues to hold above its Person’s Pivot at 97.52 overnight which is bullish.
3/02/22 (Commentary for Wednesday) The test of SPX 4280 late Tuesday set up a nice rally day on Wednesday helped by Chairman Powell’s support of just a 0.25% rate hike. We sold our trading shares in MSFT and AAPL near the close and sold our SLV shares near the open. We are back to holding ~80% cash and ~ 20% in physical gold/silver/platinum and PM equities – our favorite PM equity is SBSW, a platinum stock. Bitcoin spiked to 45455 on the New Moon today as Russian civilians flocked to the digital currency to escape their bank sanctions. Crude oil is testing $114.7 overnight Wednesday – a two-day close over $115 could lead to a quick test of the all-time high at $147. Gold made a double top at $1952 overnight Tuesday and could be heading down to test $1900 into Friday’s NFP job report. 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 to test 159’22 Tuesday but pulled back hard on Wednesday after Chairman Powell’s near-term rate-hike talk. The USD is hugging its Person’s Pivot overnight Wednesday at 97.50.
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 has 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 double-topped at $1952 overnight Tuesday going into the New Moon and could be moving down into Friday’s NFP jobs report. A close above $1960 is needed to confirm that a major rally is underway.
- Stocks – The SPX pulled back to the target of 4280 Tuesday on the 55-day Fibonacci step out from Jan 4 and into the New Moon Timing Window. That set up a nice rally on Wednesday after Chairman Powell suggested a 0.25% rate hike for the March meeting. We are holding ~80% cash after selling our AAPL and MSFT trading shares near the close today.
- Gold – Gold double-topped at $1952 overnight Tuesday and is rolling over into Friday’s NFP jobs report as it gets sold by the computers. A close above $1960 is needed to confirm a substantial rally higher is underway. We still hold about 20% in PM assets.
- Silver – Silver bounced after the exact New Moon and tested $25.47 – we sold our trading shares of SLV early this morning.
- Bonds – Bonds spiked to 159’22 on Tuesday but Chairman Powell’s rate-hike language hit bonds hard on Wednesday.
- Crude Oil – Crude oil ramped higher into the New Moon and tested $114.7 overnight – a two day close over $115 could see a quick test of the $147 all-time high.
- Dollar Index – The USD continues to hold up around its Person’s Pivot Wednesday night at 97.5.
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.
Comments