Money is put to work on the 1st trading day of the month, and I'm seeing futures up 330+ points on the DOW this morning; knowing that markets are cyclical, is super-helpful when it comes to market timing.
Last week: Trading was a little tricky, due to a little breakout on a couple $VIX (chart) views, but I was looking for a "gap fill" on the $VIX - with a 28.50 target - anyhow. You can find that $XIV alert in last weeks update. Of course anyone who is only relying on the short term $VIX for market direction, was spooked out of their long positions, but there's a lot of due diligence required, when it comes to charting, and reading the $VIX.
Speaking of gap fills on the $VIX, watch for the bears to capitulate, when the $VIX fills the gap (@ 17.50) left behind last Feb! And unless the $VIX can break out above 36, you won't see any real panic selling.
Another thing that made last weeks trade, "a little tricky", is that the fake news was blaming, "bond yields", for the selling, when it was actually panic selling in Chinese stocks, that was to blame...
Apparently investors were shocked at Biden's tough stance on China, but knowing he's a puppet for the military industrial complex, this should really come as no surprise. Joe Biden will do what the deep state tells him to do, weather its to bomb Syria, or throw china under the bus.
Reviewing the $FXI chart below: I've been bearish China, since Joe Biden's inauguration; since I pointed to this upturned triangle pattern (in red), a few weeks ago. The price action continued a little higher - once traders returned from the Luner New Year - but traded into another (black) triangle. Text book reversal, out of the bottom of an upturned triangle.
$FXI (China) - You can see where investors were shaken out below the 50 day ma., on Friday, and I suspect it will gap back up above the 50 day at today's open, and whoever engineered this, is no doubt already long. I'd expect this to consolidate higher, for a week, or 2, before taking the next leg down.
The market is now open, and there's the $FXI gapping back up, just as I predicted...
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| China gaps up... |
If you caught my Twitter alert to sell Energy, that turned out to be a good trade on Friday, but this morning we see the Dow Energy up almost 3%.
Watch for a powerful snap-back rally in big Tech as well. Good for a short term trade, at least.
Longer term - talking out a few months - the broader market needs to pullback, and I'm already picking wave 4 targets:
$NYSE - The trend is obvious. What's less obvious is what the wave 4 pattern will look like, and it's likely going to be complicated.
Looking at the above chart, show me where the "recession" is? Oh, that 1 month pullback we saw last Feb.?! So sorry, if you believe the fake news, over the charts. Go back and review my analysis, during the Covid crash. Also go back and review my analysis of the Oil crash. Where is this Russian Saudi "Oil War", Bloomberg, and the rest of the fake news was pushing? As I said at the time, it was all a BS excuse to confuse and control populations, save the global bond market, juice the economy, and markets, and of course hurt Donald Trump, and steal a presidential election. These people are sick, and to be honest I can hardly wait to see it all blow up in their faces!
For the time being, there's a lot of pent up vacation demand, and unless you're a veteran trader, you might want to take profits, and take several long vacations. Check back in May, and again in July. It's going to take at least that long, for a consolidation pattern to develop.
Stay tuned, AA
Note:If you're getting a "not secure" warning on this blog, ignore it; it's a technical thing.
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