Folks,
Market Observations for the Week: The SPX declined in an EW 5-wave down pattern into Tuesday’s close and closed under SPX 4200 support at 4176. On Wednesday, the SPX made a lower low at 4162 early, and then rallied into a positive close. Have we started a rally into the weekend New Moon/solar eclipse, or do we have lower to go into Friday? This is the second time since 1996 that equity mutual finds and ETFs saw outflows of more than $20 billion in back-to-back weeks – the other time was October 2008 during the great US financial crisis. Our bias is for lower lows into Friday/Monday and the New Moon/solar eclipse could make it scary. The Euro/USD and Yen/USD meltdowns could continue into the weekend and provide a negative catalyst for global stock markets. Bitcoin led the market higher today with a strong bounce but its pattern looked corrective. The relief rally in bonds may be over and the 10-yr US rate is bouncing higher. Crude oil looks like it is basing for a run higher into the weekend New Moon/solar eclipse. Gold is pulling back to $1877 overnight and may want to sell off into the New Moon. The USD is testing 103.4 overnight as the Yen and Euro continue to meltdown against the USD.
4/27/22 (Commentary for Wednesday) Once again following Bitcoin’s lead, the SPX managed a rally day today but the tone of the market looks weak. The relief rally for bonds may have ended and the 10-yr US rate is bouncing higher. Bitcoin may have ended a corrective bounce today and how it trades pre-market Thursday will set the tone for the SPX open. Our current holdings are ~80% cash and ~ 20% in physical gold/silver/platinum and PM equities. Today we added one SPY put and watched the SPX trade weakly into the close. Crude oil is testing its S2 pivot support line at $100.21 but appears to be coiling for a run into the weekend New Moon. Gold is flushing overnight to $1877 – closing below $1920 for two consecutive days was a sign of weakness. The USD is rallying to new highs for the year at 103.4 as the Yen and Euro continue to melt down.
Big Picture on Stocks (UPDATED) – The SPX managed to tweak out a rally day on Wednesday but its overall tone looked weak. 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. However, back-to-back daily closes below $1920 is a sign of weakness and gold is flushing down to test $1875 overnight.
- Stocks – The SPX managed to tweak out a rally day despite the weak tone of the market. The SPX confirmed a 3rd wave down from the 3/29 high which projected a test of $4162 this week and we got it early today. Our bias is for more SPX weakness into the Friday/Monday New Moon/solar eclipse.
- Gold – After two daily closes below $1920, gold is falling overnight to test $1875.
- Silver – Silver is testing $23.18 overnight Wednesday and is feeling the strong USD.
- Bonds – The relief rally in bonds may have ended on a bad bond auction today – the 10-yr US rate may bounce back up to test highs.
- Crude Oil – Crude oil is testing its S2 support pivot at $100.25 and is basing for a run higher into the weekend New Moon.
- Dollar Index – The USD is rallying to test 103.4, highs for the year, as the Yen and Euro continue to melt down.
TURNING POINT DAY
The turn window for this week is the 4/25-4/26 time window.
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