The Daily JDV Market Timer - March 30, 2022

Folks,

Market Observations for the Week:  Our bias is that the stock rally from 3/14 is a Bear Market Rally that could end in the 4/1-4/4 New Moon Timing Window. For today’s action, the 34-day Fibonacci step out from 2/24 kicked in to give us a pullback into 3/31-4/1 that looks like a 4^th wave. We are expecting a reversal up by the 4/1 New Moon that could take us up to fill the gap at 4666 and perhaps above 4700 to finish a Large Wave B test of the 1/04/22 high.  We have held our holdings at ~80% cash because of our firm belief that we are experiencing a “Large Bear Market” rally that will suck in a lot of traders/investors before it is finished. The “big boys” are engineering this large rally TO GET OUT OF THE STOCK MARKET – we expect the US economy to be in recession by Q4 and the 20-yr stock cycle points to much lower stock prices by the end of 2022. Some of our trader friends are holding UVXY and UVXY calls for today’s 4^th wave pullback that should continue into tomorrow. Bitcoin is giving us a sideways correction overnight Monday that could set the tone for the SPX early Thursday. Crude oil is trending down into the 4/1 New Moon and could undercut $100. Gold is trying to bounce into the 4/1 New Moon – a monthly close above $1923 on 3/31 would be bullish and make the quarterly chart bullish. The USD gave us 5-wave down decline to 97.68 on Wednesday – this could be the end of a sideways pattern or the start of a downtrend.

3/30/22 (Commentary for Wednesday) The 34-day Fibonacci step out from the 2/24 SPX low landed today and gave the SPX a pullback on Wednesday. Just a 3-wave SPX correction into 3/31-4/1 would be bullish and argue for a reversal up by the 4/1 New Moon to 4666-4700 by 4/4. The SPX pullback does look corrective and should count as a 4^th wave of a final blow off. The “meme stocks”, pot stocks, and other speculative issues are getting a final bid here before the next down leg starts early next week. The AAII investment survey saw a large swing from 317 to 3/24 as the Bearish % dropped 15% to 35.4% and the Bullish % rose to test highs for 2022 at 32.8%. Our Option Premium Ratio mimicked the AAII survey and dropped from 2.04 on 3/16 to 0.50 on 3/23 which shows a cycling from “extreme fear” to “bullish giddiness”. Our current holdings are ~80% cash and ~ 20% in physical gold/silver/platinum and PM equities but we have owned trading shares of APPL and FCX at times from the 3/14 low. We have seen an incredible run by AAPL – 10 rally days in a row until today - far higher and far quicker than expected. Still, we are suspicious of this rally and have seen similar performances in other bear markets. The fundamentals of this market are not stock friendly here – 1) we have a Fed that has lost its credibility on forecasting and containing inflation, 2) a crude oil price that more than doubled in the past 12 months and 3) a 2-yr/10-yr yield curve that inverted on Tuesday – a recession by Q4 is likely. Crude oil continues to decline into the 4/1 New Moon and could undercut $100 again. Gold is trying to bounce higher into the New Moon and needs to close above $1923 tomorrow to make the bullish and quarterly charts look bullish. Bonds rallied Wednesday as the 10-yr US rate pulled back to 2.36%. The USD declined in 5-waves on the hourly chart and tested 97.68.

Big Picture on Stocks (UPDATED) – The 34-day Fibonacci step out from 2/24 landed today and gave the SPX a pullback. Just a 3-wave correction into 3/31-4/1 would be bullish for a sharp reversal up by the 4/1 New Moon. The SPX could rally to 4/4 and target the 4666-4700 range.

Big Picture on PMs (UPDATED) – Gold’s 3-star critical reversal day came in as a HIGH on 3/24 and gave us a C-Wave down that undercut the Fed Day low at $1895 on Tuesday.  Gold is bouncing into the 4/1 New Moon, and if we can make a monthly close above $1923 on 3/31, both the monthly and quarterly charts will look bullish.

• Stocks – The 34-day Fibonacci correction landed today and is giving the SPX a 3-wave correction into 3/31-4/1 which would be bullish for a final thrust higher on 4/1 into 4/4 with a target of 4666-4700.
• Gold – In hindsight, gold’s 3-star critical reversal day came in as a HIGH on 3/24 and kicked off a C-Wave down into Tuesday’s low at $1893. Gold quickly recovered and is trying to bounce into the 4/1 New Moon – a monthly close above $1923 on 3/31 tomorrow would make both the monthly and quarterly chart look bullish.
• Silver – Silver ramped up to test $25 on Wednesday before rolling back to the S1 pivot support at $24.83.
• Bonds – Bonds continued to rally higher on Wednesday as the US treasury curve flattens out from the 2-yr to the 10-yr.
• Crude Oil – Crude oil appears to be declining into the 4/1 New Moon and looks to undercut $100 by tomorrow.
• Dollar Index – The USD finished a 5-wave decline to 97.68 on the hourly chart and bounced – is this the end of a large EW a-b-c pattern?

TURNING POINT DAY

The turn windows for this week are 3/30, and the NFP jobs report on 4/1.