Folks,
Market Observations for the Week: The SPX declined into our 4/14-4/18 turn window which included the 4/16 Full Moon and the 34-day Fibonacci step out from the 3/14 low on 4/17. On a whipsaw day, the SPX made an undercut low at 4370 but finished the session with a ramp higher. With the reversal higher in Bitcoin early in the day and its continued strength overnight Monday, we are looking for early strength in the SPX on Tuesday – a short-covering run to test SPX 4480 is a possibility. Overall, our bias is that the 4637 high on 3/29 was an important SECONDARY HIGH for the SPX and that we are now in a C-Wave down to test SPX 4167 – however, there is a possibility of a short-covering run to SPX 4500 by Wednesday. We are maintaining our ~80% cash holdings and 20% in the PM sector. 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/early 2023. We view the US financial war against Russia as highly destabilizing to the global USD hegemony and we could see enormous volatility in the Euro and Yen in April/May and a large USD increase in the price of gold in the second half of 2022. Crude oil ramped higher to $109.2 today in the 4/16-4/18 Full Moon Timing Window. Gold also spiked higher to $2003 before correcting. The USD is rallying to 100.89 on overnight Monday, the high for the year, as the 10-yr US rate made its high at 2.868%.
4/18/22 (Commentary for Monday) On a whipsaw day, the SPX gave us an undercut low at 4370 and then finished the session with a ramp higher that almost took the SPX positive. With the reversal higher in Bitcoin today, we are bracing for a possible short-covering rally in the SPX early Tuesday. Because we are in the orb of a 3-star critical reversal day for the SPX and the 34-day step out from the 3/14 low which fell on 4/17, we are open to the possibility of a strong short-covering rally in the SPX early Tuesday that could fill the gap at 4480. Bitcoin may have reversed higher from a “daily cycle low” early Monday and looks strong overnight – that should augur well for early strength in the SPX on Tuesday. Our current holdings are ~80% cash and ~ 20% in physical gold/silver/platinum and PM equities. 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 – a US recession by Q4 is likely. Also, the US-led financial war against Russia could lead to blow backs on the Euro, Yen and USD price of gold. Despite the Shanghai shutdown, crude oil bounced to test $109.2 today in our Full Moon Timing Window. Gold also spiked higher in today’s Full Moon Timing Window and tested $2003– did the 3-star critical reversal day on 4/15 come in as a high? Bonds continued their decline to 140’00 Monday and we got a higher 10-yr US rate to 2.868%. The USD is making highs for the year Monday night at 101.02.
Big Picture on Stocks (UPDATED) – The 34-day Fibonacci step out from 2/24 landed on 3/29 and peaked the bear market rally in the SPX and NDX – the plunge in the DJTA after 3/29 confirmed that top as an important high. The SPX made an undercut low today at 4370 and ramped higher into the close – did the 3-star critical reversal day come in as a low today?
Big Picture on PMs (UPDATED) – Gold made a monthly close at $1942 on 3/31, so both the monthly and quarterly charts look bullish. Gold gave us a 3-wave decline on Thursday to $1963 but bounced back to test $2003 on Monday – did the 3-star critical reversal day come in as a high today.
- Stocks – The spike in the 10-yr US rate to highs for the year at 2.868% on Monday pressured the SPX to an undercut low at 4370 and cast doubt on the “peak inflation” mantra of many traders. However, the SPX is in the orb of a 3-star critical reversal day and the way the SPX ramped higher into the close could see more follow through on Tuesday.
- Gold – Gold spiked to test $2003 today in the Full Moon Timing Window – did we make a high on the 3-star critical reversal day?
- Silver – Silver spiked higher to test $26.50 but then corrected – tomorrow is a Big Range Day for silver and we should get some volatility.
- Bonds – Bonds made lower lows on Monday to 140’00 and that took the 10-yr US rate to 2.868% Monday afternoon.
- Crude Oil – Crude oil spiked to $109.2 today in the 4/15-4/18 Full Moon Timing Window.
- Dollar Index – The USD is making highs for the year at 101.02 Monday night.
TURNING POINT DAY
The turn window for this week is the 4/15-4/18 Full Moon Timing Window which includes a 3-star critical reversal day for the SPX and gold.
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