The Daily JDV Market Timer - March 3, 2022

Folks,

Market Observations for the Week:  The SPX rallied to 4417 early and then started a correction which got amplified after hours as Russian forces started shelling Ukraine’s largest nuclear power plant. 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 Friday 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 developments 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 peaked at 45407 on the 3/2 New Moon and started what appears to be a 4^th wave correction – a 5^th wave rally by 3/7-3/8 is possible. Crude oil rallied to test the R2 resistance pivot at $116.57 yesterday before a 3-wave decline – a two-day close above $115 could give us a quick test of the all-time high in 2008 at $147. Gold spike-tested $1954 Thursday evening on the nuclear reactor fire in Ukraine but still may be pulling back to test $1900 again as the computers are programmed to sell gold into Friday’s NFP report. We sold our SPY calls early today on the early SPX rally. We also have a 20% allocation to gold/silver/platinum in various forms. The USD spiked to 98.08 overnight Thursday on news of the fires at the Ukrainian nuclear reactor.

3/03/22 (Commentary for Thursday) The SPX rallied to 4416 early before correcting on Thursday. We sold our trading shares in SPY 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 Wednesday and started what looks like a 4^th wave correction. Crude oil tested $116.57 early Thursday before a 3-wave correction – a two-day close over $115 could lead to a quick test of the all-time high at $147. Gold spiked higher to test $1954 Thursday evening but could head down 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 159’14 Thursday night on the scary news from the Ukraine but pulled back later when the reactor fire was put out. The USD rallied to 98.08 on scary developments overnight in the Ukraine.

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 this week, the 55-day Fibonacci step out from the Jan 4 high.

Big Picture on PMs (UPDATED) – Gold spiked to test $1954 overnight Thursday but 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 rallied to 4416 early Thursday before a correction that got worse into the evening. The SPX is at an important inflection report as we approach tomorrow’s NFP jobs report.  We are holding ~80% cash after selling some SPY trading shares early Thursday.
• Gold – Gold spiked to $1954 Thursday evening on Ukrainian news but could be moving down into the early Friday NFP report. A close above $1960 is needed to confirm a substantial rally higher is underway. We still hold about 20% in PM assets.
• Silver – Silver is wedging into an apex as we approach Friday’s NFP jobs report.
• Bonds – Bonds spiked to 159’14 Thursday evening as a nuclear reactor caught fire.
• Crude Oil – Crude oil ramped higher to test $116.57 but declined in only 3-waves  – a two day close over $115 could see a quick test of the $147 all-time high.
• Dollar Index – The USD spiked to 98.08 on scary war news from the Ukraine.

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.