Folks,
Market Observations for the Week: We got a gap-down open on the SPX Monday, but no mini-crash. The SPX found support at 4200 - the intersection of the downtrend line from 4818 on 1/4/22 and the uptrend line from the Covid low on 4/23/2020 could give us a bounce while the market waits for the earnings from MSFT after the close on Tuesday. Our bias is that we are getting a “dead cat bounce” that could take us to SPX 4350 or so. The relief rally in bonds took us to 142’12 but may be rolling over already. Bitcoin tested its S2 pivot support at 38261 pre-market and is rallying to 40540 overnight. Gold and gold stocks gave us a big gap down today going into Comex option expiration tomorrow and gold closed below important support at $1920 which could give us a big whoosh down tomorrow. The USD made highs for the year at 101.86.
4/25/22 (Commentary for Monday) The SPX gave us a gap-down open but not a mini-crash and we found support at SPX 4200 for a “dead cat bounce” that could take us into the MSFT earnings report after-market Tuesday. The relief rally in bonds from Wednesday continued into Monday and tested 142’12 before rolling over late – the DSI numbers for US bonds paint a bullish picture. Bitcoin is rallying over 40,000 Monday night and that augurs well for a positive SPX open on Tuesday. Our current holdings are ~80% cash and ~ 20% in physical gold/silver/platinum and PM equities. Today we sold our SPX put early and are waiting for more rally on Tuesday to re-enter. The 10-yr US bond rate pulled back in 3-waves to test 2.76% and that supported the stock market. Crude oil pulled back to tag $95.42. GLD and the GDX both gapped down today and gold closed below key support at $1920 which is bearish for tomorrow’s Comex gold option expiration. The USD rallied to 101.86 which is the high for the year.
Big Picture on Stocks (UPDATED) – The SPX gave us a hard day down on Friday, but after a gap-down day early Monday we got a relief rally that could hold up into the MSFT earnings after-market Tuesday. The SPX confirmed a 3rd wave down from the 3/29 high which is bearish and may be looking to test $4162 this week.
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 closed below key support at $1920 Monday and that could give us a whoosh down on tomorrow’s Comex gold option expiration.
- Stocks – After a gap-down open, the SPX found support at 4200 and is giving us a “dead cat” bounce that could carry us into late Tuesday. On Thursday, the SPX confirmed a 3rd wave down from the 3/29 high which projects to test 4162 this week.
- Gold – Gold plunged below to $1892 early Monday and failed to close above $1920 which augurs for more weakness going into tomorrow’s Comex gold option expiration.
- Silver – Silver tested $23.42 on Monday before bouncing but typically trends down into the Comex option expiration on 4/26.
- Bonds – The relief rally continued and bonds tested 142’12 and helped give stocks a bounce.
- Crude Oil – Crude oil fell hard to test $95.42 as Chinese weakness is trying to take hold.
- Dollar Index – The USD rallied to test 101.86 – the high for the year.
TURNING POINT DAY
The turn window for this week is the 4/25-4/26 time window.
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