Thursday, March 18, 2021

Market Update ahead of March OPEX - 3/18/2021

 "OPEX" is short for Options expiration, and that's tomorrow, Friday.

I've been super-busy over the past couple weeks, and no time to blog, but the market has continued to hold up over the past few weeks, and retesting the highs, just as I predicted (in the past several updates). It could continue to hold up going into the holidays (Passover & Easter), considering that the pro short sellers know better than to short a dull market, but regardless of when the market is sold - now or in May - I'm not liking this DOW 33,000 level, and there's a good chance we see window dressing come down, and a mad dash for the exits, some time within the next 3 weeks.  

The DOW chart: Technical, and psychological support at 30k ( seen at the lower end of the broadening triangle  pattern (in black), and that would look like a bullish 10% pullback to most investors, and bring buyers in. Could look like a summer rally, but it's too soon to predict timelines. There's also more obvious support at the 29.6 level (the Feb. 2020 high), and a gap fill target at 28,500.


I'm having a little trouble lining up the $SPX chart the DOW targets but there's Feb 2020 support @ 3393, and more support at 3300. 

The catalyst:

Considering how bullish everyone is on the housing market, and commodities, and the capitulation patterns, I'm seeing in those charts, I'd expect crash there. If China refuses to deal with the Biden administration, than that could be the catalyst, for a lot of broken promises.  

I'm talking about this massive broadening top on the #XHB Home Builders ETF: 




You can see the same broadening top pattern on the high beta chart below. 


But the most massive broadening top of all can be found on the Global Dow chart, and EEM. You should recognize it as a massive wave B triangle, which would mean that all the Fed easing, and monetary manipulation has done nothing to solve the financial crisis which started, even before, the crooked Clinton administration, and the crooked Republicans (who controlled congress at the time),  did away with the Glass Steagall act. The Fed had been pushing for this (deregulation) for some time, and even today you see the deceptively named Fed playing politics. They wanted fiscal stimulus, and this was all the excuse congress needed to spend another $1.9 trillion on social programs, and bailouts, and there's no doubt in my mind, this money will never be paid back.   

Read: "Mr. Weill Goes to Washington" 

                                          

Global DOW: Looks like the next crash into what I would call a "super-cycle" wave C, is going to look like 2008, all over again. A "double dip", if you will.  


Wave E reversals are violent, and wave C's are very powerful, so the reversal should be easy to confirm. 

Have a great holiday, if I don't talk to you again before then. 

Tuesday, March 9, 2021

Short squeeze in Semiconductors 3/9/2021

 Tweeted out this $SOX chart yesterday afternoon, when I noticed that the rug had been pulled out on the Semiconductors rally. The bid was lowered at the open, in order to break support, from the previous trading day (Friday). 


I'm expecting a massive 15 - 20% move in $SOXL today, but don't fall in love with the upside. 

Take Care, AA 

Monday, March 8, 2021

Week in review, and a look ahead... Market update, 3/8/21

After last weeks selling, Friday looked like your typical "Friday short squeeze", and we ended pretty much flat for the week. Tech down, Energy up. So, now what? 

After the big moves we've seen over the past week, I'm expecting the market to consolidate (pause). 

We could continue to see mixed markets

Looking at the major indexes: 

The DOW is trading back above the 31,000 level, and the 50 day moving average. I think we could easily see a retest of the highs, before we see a correction.  March is a big window dressing month, and Passover falls on March 27, and Easter April 4th, and that is the catalyst for more upside. This is prime time for market manipulation, in the form of more meaningless short squeezes.


$NYSE - of course any retest of the recent market highs are going to be another selling opportunity, but not until traders return, from holiday, or May (selling season), which ever comes first. 



NASDAQ 100 (big tech) - no doubt money is going to be put back to work here, once the powers that be are finished with their engineered (planned) sector rotation (out of tech and into energy). "There's always a bull market somewhere"?  

Watch the 12k level for support, followed by another breakout above 12440 support. Even if 12k was to break, there's the 200 day moving average, and more support @ 11,500 (at my pink line), so I see little risk here. Like, 0 risk... until after the holidays. 


I think we could see taking in the Russell, and the so called value trade, and I mentioned financials on Friday. I can only cover so many sectors at a time, especially when charting oil, and such. 

Speaking of Oil, we saw WTI crude breakout above the $65 level again, followed by a supposed terrorist strike on a Saudi Oil facility, over the weekend? This just seems a little too convenient to me, but we'll see if these levels can hold, this time.  


The $VIX remains contained... 

$SPX continues to trade in a range - seen in black. It broke out above the 50 day ma, on Friday, but Friday short squeezes don't count... another shakeout wouldn't hurt. 



Take care, AA  




 

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Friday, March 5, 2021

Market Update - 3/5/2021

 I started a blog concerning the commodities/ Oil trade a couple days ago, but due to the current market volatility, that will have to wait. 

Picking up where we left off on Monday; fear (as measured by the $VIX) remains contained. It was good to see some moving averages - namely in the $SPX and the $SOX - finally taken out, and no doubt many short term traders were shaken out in yesterday's bear raid. I'm not 100% sure the selling pressure is over, but yesterday's panic-selling presented me with a great opportunity to cover some short bets.

Remember, volatility works both way. You can see massive moves in either direction, at these $VIX levels, and if you didn't sell the breakout above $VIX 25, you haven't been following my blog updates.

Watch the 25 level, and expect short sellers to cover, when it breaks! 

Also see the $VIX targets I laid out on Monday, if you missed it.  


On a long term basis the market remains very over-bought, but short term I think the selling is a little over-done, and basically it comes down to, whether the bullish trend is broken (which it's not), and Options Expiration (manipulation) which is only 2 weeks away. Today is Friday, so you don't want to be short going into the weekend anyhow. 

 If you recall: This selling started in China, and spread to several other sectors, although we've yet to see financials correct. This could mean continued mix markets, and sector rotations, as one sector corrects at a time. 

$FXI China


I remain super-bearish energy, but we could see it go a little higher, before a reversal; even if I'm right, in the end. Don't follow the herd, and don't play chicken with a possible wave III! Don't trade Oil, unless you have enough discipline to exit a losing trade. Don't fight the trend! 



Take Care, AA