Folks,
Market Observations for the Week: The SPX peaked at 4546 on Friday near the .618 retracement of the 1/04/22-2/24/22 decline and we got a TRIN-5 sell signal on the close with the TRIN-5 closing < 4.0 at 3.85. We expect to see a selling wave into 3/30 that should undercut the SPX 4400 level. On our last TRIN-5 sell signal on 2/9, the SPX gave us a 226 point decline in the next three trading days and we expect something similar early this week. Instead of a “panic day” on 3/25, we actually got a final move higher into the .618 retracement level at SPX 4546. Are we starting a C-Wave down here that could undercut SPX 4176 (our EW alt count) or just a corrective pullback that back tests the downtrend line from 1/04/2022 in a rally up to ~5100? We will probably find out this week. We are getting more cautious here as our “alternate EW-count on the SPX” may have completed its rally pattern near the 3/25 high at SPX 4546. We are now in 70% cash and 30% PM holdings. Bitcoin is spiking up to test 47485 Sunday night – this is bullish for a positive opening on Monday. Crude oil is testing $110 overnight Sunday. Gold closed above $1952 Friday which is bullish but is pulling back to $1945 Sunday evening as the USD breaks out of its rising wedge to test our target at 99.
3/27/22 (Commentary for Sunday) The SPX rallied up to test its .618 retracement of the 1/04/44 high on Friday and may be close to a trading top. Our TRIN-5 indicator gave us a SELL SIGNAL on Friday and we are looking for a strong decline to start on Monday. Our short-term bias is for a 3-wave correction into Wednesday that could undercut 4400. The SPX rallied into Friday under extremely overbought conditions and started to look frothy with “meme stocks”, pot stocks, and other speculative issues getting a bid. The AAII investment survey saw a large swing from last Thursday 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 ~70% cash and ~ 30% in physical gold/silver/platinum and PM equities. Following Bitcoin’s overnight Sunday strength, we could see early stock market strength into Friday up to SPX 4530. Crude oil is rolling over to test $110 Sunday night. After making a Friday close above $1952, gold is pulling back to test its S2 support pivot at $1945 Sunday night – solar-lunar cycles are predicting big volatility into Monday. Bonds are testing Friday’s lows at 146’20 and the 10-yr US rate could be testing 2.50% early Monday. Higher rates are helping the USD break out to 99.13 Sunday evening.
Big Picture on Stocks (UPDATED) – The SPX rallied to highs for the week on Friday at 4546 – it is possible that its 3-star critical reversal day landed on 3/25 as a HIGH. We are holding about 70% cash in our accounts and ~30% in gold/silver/platinum in various forms.
Big Picture on PMs (UPDATED) – Our bias is that gold made an important low at $1895 on Fed rate-hike day last week and we have a symmetry target of $1980 in the near term.
- Stocks – From 3/14, the SPX may have completed a 5-wave rally to 4546 on Friday on the .618 retracement and started a correction. We got a TRIN-5 SELL signal on Friday’s close and could see a correction start on Monday.
- Gold – Gold made a weekly close above $1952 but is pulling to test $1945 Sunday evening. We have a symmetry target to $1980.
- Silver – Silver tested $26.20 on Thursday but is pulling back to test its S2 support pivot at $25.43 Sunday night.
- Bonds – Bonds are testing Friday’s low at 146’20 Sunday night and we could see the 10-yr US rate open Monday at 2.50%.
- Crude Oil – Crude oil tested $110 support Sunday evening and is bouncing.
- Dollar Index – The USD is breaking out of its wedge Sunday evening and testing 99.13.
TURNING POINT DAY
The turn windows for this week are 3/29, and the NFP jobs report on 4/1.
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