The Daily JDV Market Timer - March 31, 2022

Folks,

Market Observations for the Week:  The 34-day Fibonacci step out from 2/24 kicked in to give the SPX a pullback into 3/31-4/1 that looks like a 4^th wave correction. The last hour of today’s session saw heavy stock selling that shot the $TRIN up to 2.87 at the close. Our bias is that we will see a reversal higher after the NFP report early Friday and rally up to fill the gap at 4666 and perhaps above 4700 by early next week 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 early Friday. Bitcoin continued to roll over Thursday night and is testing its S2 pivot support at 44050 – this argues for early weakness in the SPX on Friday. Crude oil is trending down into the 4/1 New Moon and could undercut $98. Gold rallied to test $1957 in the afternoon before closing at $1942 - the monthly close above $1923 on 3/31 is bullish and made the quarterly chart bullish. The USD gave us 5-wave down decline to 97.68 on Wednesday but rebounded on Thursday to test 98.50.

3/31/22 (Commentary for Thursday) The 34-day Fibonacci step out from the 2/24 SPX low landed Wednesday and gave the SPX a pullback into the 3/31-4/1 New Moon Timing Window. The SPX correction into late 3/31 looks corrective and argues 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 pattern that should peak early next week. The “meme stocks”, pot stocks, and other speculative issues got a final bounce this week before the next SPX down leg starts around 4/5. The AAII investment survey saw the lowest Bearish % since the Nov 2021 NDX high. Our current holdings are ~80% cash and ~ 20% in physical gold/silver/platinum and PM equities but we added some AAPL shares near the close today for a final rally higher. 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 US recession by Q4 is likely. Crude oil continues to decline into the 4/1 New Moon and could undercut $100 again after Biden’s decision to release more oil from the Strategic Petroleum Reserve. Gold rallied to $1957 late Thursday and bullishly closed at $1942 – the highest monthly and quarterly high ever. Bonds got a bid on Thursday as the SPX corrected and the 10-yr US rate declined to 2.33%. The USD declined in 5-waves on the hourly chart and tested 97.68 on Wednesday before bouncing back to 98.50 on Thursday.

Big Picture on Stocks (UPDATED) – The 34-day Fibonacci step out from 2/24 landed today and gave the SPX a pullback into late 3/31. The 3-wave correction into 3/31-4/1 looks bullish for a sharp reversal up by the 4/1 New Moon. The SPX could then rally to 4/5 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 made a monthly close at $1942 on 3/31, so both the monthly and quarterly charts look bullish.

• Stocks – The 34-day Fibonacci correction landed Wednesday and gave the SPX a 3-wave correction into late 3/31. We are looking for a reversal higher after the NFP jobs report early Friday and a final thrust up into 4/5 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 rallied to close at $1942 and  made a monthly close above $1923 on 3/31 which made both the monthly and quarterly charts look bullish.
• Silver – Silver rallied up to $25.29 on Thursday before pulling back to $25 on the close.
• Bonds – Bonds continued to rally higher on Thursday as the US treasury curve flattens out from the 2-yr to the 10-yr.
• Crude Oil – Crude oil is declining into the 4/1 New Moon and could undercut $98 by early Friday.
• Dollar Index – The USD finished a 5-wave decline to 97.68 on the hourly chart on Wednesday but bounced back to 98.5 on Thursday.

TURNING POINT DAY

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