Lots of news/noise this week!
Between the mini banking crisis and banks bailing eaother out, the 2yr and oil beat down - where do we go from here?
To start, they basically saved the weekly candle on the SPX. We need to close the week above the 200dma and outside of the bear market down -trendline @ 3930.
We have open gaps above us but my thesis is basically we run SPX to 4600 for the final upper gap fill over the next 6 weeks, then we roll over. This would math history pretty well as in 2008 when Bear Sterns failed, SPX rallied ~25% before Lehman and the market collapse.
NDX has a super clean breakout on the weekly chart.
The 2yr is now below the FFR - The bond market knows Powell is done so I would expect a 25bps and pause from them.
FTSE just reclaimed its 200dma
For the first time in a long time, the Market finally has lots of shorts in it that can be unwound in a hurry - hence I wouldn't be surprised to see another 20% rally out of the SPX over 6 weeks or so like we saw last summer. Once we gap fill 4600 - then we will have a structural sell as there is a 100yr trendline up there as well.
Nobody is positioned long, and it could very well be the pain trade. If you told me a year ago, in the face of an energy crisis, War, global debt - that EU stocks would be nATH - I would of bought drugs from you - yet here we are.
Between the mini banking crisis and banks bailing eaother out, the 2yr and oil beat down - where do we go from here?
To start, they basically saved the weekly candle on the SPX. We need to close the week above the 200dma and outside of the bear market down -trendline @ 3930.
We have open gaps above us but my thesis is basically we run SPX to 4600 for the final upper gap fill over the next 6 weeks, then we roll over. This would math history pretty well as in 2008 when Bear Sterns failed, SPX rallied ~25% before Lehman and the market collapse.
NDX has a super clean breakout on the weekly chart.
The 2yr is now below the FFR - The bond market knows Powell is done so I would expect a 25bps and pause from them.
FTSE just reclaimed its 200dma
For the first time in a long time, the Market finally has lots of shorts in it that can be unwound in a hurry - hence I wouldn't be surprised to see another 20% rally out of the SPX over 6 weeks or so like we saw last summer. Once we gap fill 4600 - then we will have a structural sell as there is a 100yr trendline up there as well.
Nobody is positioned long, and it could very well be the pain trade. If you told me a year ago, in the face of an energy crisis, War, global debt - that EU stocks would be nATH - I would of bought drugs from you - yet here we are.
Trade active:
Bond market has moved on. 25bps and pause.
Fed can say whatever they want but at the end all they do is chase the 2yr.
2yr now <FFR
Historically - when this happens, we get a pop in markets into the final top
Fed can say whatever they want but at the end all they do is chase the 2yr.
2yr now <FFR
Historically - when this happens, we get a pop in markets into the final top
Trade active:
Auntie Yellen crashed the market yesterday - she tried to fix it today.
For all the noise and thrashing around - was this just a back test of the bear market trendline?
The REAL issue right now - is banks. Once Banks can move up -this market is POISED to fly.
For all the noise and thrashing around - was this just a back test of the bear market trendline?
The REAL issue right now - is banks. Once Banks can move up -this market is POISED to fly.
Trade active:
/ES tagged 20 month SMA today and rejected it TO THE TICK.
We are at a super important inflection point.
DJI is breaking over 20mo SMA
NDX rejected its 20mo
CASH SPX hasn't tagged it - YET
Super interesting confluence up here to watch.
We are at a super important inflection point.
DJI is breaking over 20mo SMA
NDX rejected its 20mo
CASH SPX hasn't tagged it - YET
Super interesting confluence up here to watch.
Trade active:
We are +10% on SPX since I posted this idea originally.
Since then, we have had an AI driven stock Mania - and they passed the debt ceiling bill.
Everyone and their dog has piled in long at this point and I think we are very near a top.
Take a look at the WEEKLY RSI of NVDA as its 86, and price is jammed up above and outside its WEEEKLY Bollinger Band
AMZN, MSFT, AMD, GOOG, META - all have similar looks to them.
And the best part about it - the VIX is back to pre-covid levels. This by definition is the "return to normal" phase in the market bubble - and everyone is falling for it like they always do.
FWIW - this was all just a .618 Fib back test of the Wave 1 down on SPX - the Nasdaq is a little bit higher due to the moon job in AI stocks
But this is all because of 8 stocks - if you look at the equal weighted indexes
RSP
, there is no new bull market here.
For added fun, the Fed isn't providing liquidity - and the Treasury is about to issue out $1tn of bonds in June. This will cause rates to continue to spike alongside DXY - both of which the market has been ignoring lately.
June will prove to be a real tell in the market!
Since then, we have had an AI driven stock Mania - and they passed the debt ceiling bill.
Everyone and their dog has piled in long at this point and I think we are very near a top.
Take a look at the WEEKLY RSI of NVDA as its 86, and price is jammed up above and outside its WEEEKLY Bollinger Band
AMZN, MSFT, AMD, GOOG, META - all have similar looks to them.
And the best part about it - the VIX is back to pre-covid levels. This by definition is the "return to normal" phase in the market bubble - and everyone is falling for it like they always do.
FWIW - this was all just a .618 Fib back test of the Wave 1 down on SPX - the Nasdaq is a little bit higher due to the moon job in AI stocks
But this is all because of 8 stocks - if you look at the equal weighted indexes
RSP
, there is no new bull market here.
For added fun, the Fed isn't providing liquidity - and the Treasury is about to issue out $1tn of bonds in June. This will cause rates to continue to spike alongside DXY - both of which the market has been ignoring lately.
June will prove to be a real tell in the market!
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1)
2) What is super scary about this chart pattern - is you can see it clear as day on a non-linear chart that the
The
all while the Transports
Dow Theory shows this as a divergence - companies like
Small caps - the MOST debt sensitive industry and typically the leader of markets - definitely looks to be breaking lower
Daily Charts:
What is wild, is the mega cap stocks have dragged the indexes higher - this is NOT broad based rally. A lot of me thinks this is window dressing into EOM for funds to prove the own the big performers - but the daily charts surly suggest caution from here:
So I have no idea what happens next - and neither does anyone else. But we are at a super key area on the monthly charts here at the 20 month SMA. We could poke above them and go a little higher - although I think by May 5th we will have more clarity with the FOMC and