Folks,
Market Observations for the Week: The “dead cat bounce” from Monday did not even last overnight for the E-mini and the futures started declining before the open. The SPX opened at 4278 and dropped over 100 points before a bounce into the close. If the SPX opens strong after the good MSFT earnings early Wednesday, that could be another rally to short. However, back-to-back “single digit” new 52-wk hjghs on the NYSE and a TRIN-5 > 7 and a CNN Fear & Greed Index drop from 40 to 26 argue that the bear side is getting stretched here. Bitcoin led the market down today and needs a strong bounce early Wednesday to give the SPX and NDX a boost. The relief rally in bonds took us to 143’05 today but the 10-yr US rate gave us 5-waves down on the hourly chart which may be bullish for US bond prices. Crude oil is bouncing back over $100 Tuesday night and may start a run higher into the weekend New Moon/solar eclipse. Gold is slipping under $1900 Tuesday night and once again failed to close above $1920 during today’s Comex gold option expiration. The USD continues to power higher at 102.4 overnight.
4/26/22 (Commentary for Tuesday) The SPX opened big at 4278 but fell over a +100 points into the close. The relief rally in bonds from 4/21 gained some steam and got us to 143’05 – the DSI numbers for US bonds paint a bullish picture. Bitcoin undercut 38,000 and got to 37,665 as it led the SPX down into the close - an overnight rally would be welcome to the bulls. Our current holdings are ~80% cash and ~ 20% in physical gold/silver/platinum and PM equities. Today we missed buying a SPY put early and watched the SPX decline steadily through the day. Crude oil rallied to above $100 Tuesday and may be on a run into the weekend New Moon. Gold didn’t close above $1920 on the close and that opens the door to an undercut low below $1891 on Wednesday. The USD rallied to new highs for the year at 102.4 on multi-year Euro weakness.
Big Picture on Stocks (UPDATED) – The SPX gave us another big down day after the “dead cat bounce” petered out near the open. The SPX confirmed a 3rd wave down from the 3/29 high which is bearish and may be looking to test $4000 by this weekend.
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 struggled to stay above $l900 overnight Tuesday and that could give us a whoosh down tomorrow.
- Stocks – The “dead cat” bounce petered out pre-market and the SPX dropped another 100 SPX points on Tuesday. Early strength from the MSFT earnings report on Wednesday should be faded. The SPX confirmed a 3rd wave down from the 3/29 high which projected to test 4162 this week – we got to SPX 4175 near the close.
- Gold – Gold failed to close above $1920 again on today’s Comex gold option expiration – we could see a whoosh down early Wednesday.
- Silver – Silver tested $23.65 overnight Tuesday.
- Bonds – The relief rally continued, and bonds tested 143’05 as stocks plunged into the close.
- Crude Oil – Crude oil bounced above $100 and may be starting a run higher into the weekend New Moon/solar eclipse.
- Dollar Index – The USD rallied to test 102.4 – 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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