20% Market Rally Ahead?

16 Mar 2023

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.

16 Mar 2023

Trade aktif

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

23 Mar 2023

Trade aktif

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.

12 Apr 2023

Trade aktif

/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.

30 Apr 2023

Catatan

SPX is +5.5% since the date I published this article - and we are now at a PIVOTAL point in the markets heading into the FOMC in the next 72 hours.

1) SPX is now back at its 20-month SMA. In 2000 and 2008, you can see where this has been the back test and this it is lights out for the markets.

2) What is super scary about this chart pattern - is you can see it clear as day on a non-linear chart that the SPX now looks like the textbook bubble chart


NDX has the exact same formation:


The DJI looks like its trying to breakout :

all while the Transports DJT don't look nearly as strong:

Dow Theory shows this as a divergence - companies like UPS and FDX just reported bad quarters - which isn't really bullish.

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:

FB

MSFT



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 AAPL Earnings behind us.

3 Jun 2023

Trade aktif

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!