Financial Market Timing

The Daily JDV Market Timer - February 7, 2023

Folks,

Market Observations for the Week: The SPX showed a lot of volatility during Powell's interview today but ended the day higher. Once again the tech stocks, fed by a growing AI-bubble, led the way. However, during the day, the SPX did print an EW 5-wave decline from Thursday into today's low and that is a SELL SIGNAL for us. In our view the SPX has already priced in a "soft economic landing" and we continue to remain cautious and continue to raise our cash levels - there could be a much better opportunity to buy the SPX in May/June based on our cycle count. The much hotter than expected NFP jobs report gave traders a reason to sell on Friday and Monday but the Fed speak today made the market happy.  Monthly and weekly Fibonacci step outs from the 1/4/22 SPX high point to the first half of February as a reversal time window. Our intermediate-term bias is that the SPX rally from 10/13 is a Bear Market Rally and our Time Window target is now into the first half of February. Our price target for this Bear Market rally is the 50%  retracement area around 4150 (achieved Thursday) or the 61.8% retracement around 4300. The NDX has been leading the market higher and has outperformed both the SPX and DJIA - investors have moved from the industrial stocks back to chasing technology stocks again like the AI stocks.  Crude oil rallied to $77.60 as crude oil continues to bounce from the its Full Moon low. Gold has corrected sideways from Friday and got a bounce to $1884 after Powell. The USD traced out a clear 5-waves higher from 100.8 to 103.96 this afternoon before a 3-wave decline.

2/07/23 (Commentary for Tuesday) The SPX is in the Time Window - the first half of February - for a major turn and we have a SELL SIGNAL in our Option Premium Ratio. We will need to see an EW 5-wave decline on the hourly chart for a confirmation signal - nothing yet.  We still contend that the market rally from October 13 is a Bear Market Rally that will make new lows in Q2 2023 - we are not in the "this is a new bull market camp". Our Bear Market Time Window target is the first half of February which included a Fed Day on Wednesday, AAPL and AMZN earnings on Thursday, a NFP jobs report on Friday and a Full Moon on Sunday.  We did not see a SPX capitulation or a VIX blow off in 2022 but do believe that lower SPX lows are due in Q2 of 2023 for the stock market. The China reopening after its Covid lockdown is bullish for crude oil – we like buying pullbacks below $70 if seen. The USD made a low at 100.8 on Wednesday night and bounced to test 103.6 on Monday. We currently hold 70% cash, 10% uranium stocks and 20% in physical gold/silver/platinum.

Big Picture on Stocks (UPDATED) The SPX rallied in an EW 5-wave pattern from 12/22 into 1/23 - the 3-wave pullback into 1/25 was bullish for more rally into Fed Week. However, the SPX could still give us a 20%-50% correction by Q2 2023 - down to SPX 2400 - as the 20-yr stock cycle low bottoms and the US economy slows into a recession. The 13-month Fibonacci step out from the 1/4/22 SPX high and the 55-wk Fibonacci step out have us looking to the first half of February for an important turn - this should be a trading high for the SPX. We favor a high percentage of cash for capital preservation.

Big Picture on PMs (UPDATED) We consider the rally from 10/13/22 as a bear market rally in gold, silver and the PM stocks that should peak in the first half of February. However, we still expect gold stocks to test their COVID lows sometime in Q2 of 2023 as the 8-yr gold cycle and the 20-yr stock market cycle converge on the downside. Central bankers loaded up on gold last year and global physical inventories continue to decline but higher nominal US rates could still pressure the PM sector down into Q2 2023.

Stocks – The SPX tested 4195 on Thursday and started a correction into the 2/5-2/6 Full Moon Timing Window - we have a Major Sell Signal on our Option Premium Ratio and our playing it conservatively here. Powell's speech tomorrow provides the market a catalyst.

GoldGold just corrected sideways into Monday and could see another leg down.

Silver – Silver gave us 5-waves down to $22.17 Monday.

Bonds - Bonds gave us 5-waves down on the hourly into Monday.

Crude Oil – Crude oil pulled back to test $72.25 on Monday's Full Moon Timing Window and bounced to $74.69.

Dollar Index – The USD rebounded to 103.6 on Monday.

TURNING POINT DAY

The turn window for this week is the 2/6-2/7 Full Moon Timing Window.

.


February 06, 2023

February 05, 2023

February 02, 2023

February 01, 2023

January 31, 2023

January 30, 2023

January 29, 2023

January 26, 2023

January 25, 2023

January 24, 2023