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Wednesday, March 1, 2023

China's Bullish Reversal, and A Bold Call on the $SPX

It seems like I was just talking about how China has been crashing back to earth, for the past several weeks, and here we are - only 1 month later - seeing a bullish reversal - on Chinese manufacturing data. 

Chinese factory activity expands at fastest pace in more than a decade

$YINN - predicting an abandoned Island reversal pattern, and a short squeeze, continuing into March. Should look something like this. 20 - 30% gains. 

 *OPEX (in 2 weeks). *Options Expiration is the whole reason for engineering the short squeeze.

I was just looking at the China charts, and decided to take a pass on that trade, so I'm going to miss out on some massive gains in $YINN today, and I don't trade Options.  

Funny, the Lame Stream Media will report China supporting Russia... and every other kind of MIC (military Industrial Complex) propaganda, but then when the Algorithms drive Chinese markets higher, they switch their story, and claim that the China story is even lifting European markets!

They also claimed that this was helping to lift Oil markets, but Oil has since faded the rally - at the 50 day moving average.    


I remain super bearish Europe, and especially as we see this latest cycle unfold. 

European Investors Riding Buyback Boom Face Risk of Pullback

I'd say Europe faces more than a pullback! Buybacks are the last phase of an economic boom! 

Speaking of Europe 

"Spain’s transport secretary and the head of rail company Renfe have quit over an order for trains that are too wide for the country’s tunnels"  
 I thought I heard breaking news, that Spain's Debt to GDP estimates - for the past 3 years - needed to be revised (higher), but not finding that story.  

Italy to hike 2020-22 budget deficits due to green incentives, sources say reuters 

00:0301:12Prue Leith Used to Deliver Food in a BMW Isetta MicrocarBuying Cars in America Is Going Online, But Dealers Are Here to StayApple Is Still Trying to Make Your Phone Into Your Car Key2024 Ford Mustang Starts at $32,515, Dark Horse Base Price Is $59,565Nissan Recalls 809,000 Rogues Because the Key May Collapse and Shut the Vehicle OffPrue Leith Used to Deliver Food I've been wondering what's been holding the market up, and at least that question is answered.

US Markets 

$SPX - 60 min. view -  This is becoming a pretty tough call, as we continue to chop sideways, but I still like the 3850 target. 

I would want to see this washout, well ahead of March OPEX, which is only a little more than 2 weeks away. May just continue to chug lower, on a low $VIX. 

I think most technicians are expecting to see money managers chase performance, going into March, which is a big window dressing month, but if instead, we see the rug pulled on the 1st Monday of the month, and not recover, until after the next Fed meeting, that might be enough to shake out most weak hands, and even set a nice bear trap...!  That scenario seems to line up pretty well on the above chart. 

Of course watch for some fake news to provide the catalyst for such a move. "Longest loosing streak since August", perhaps?  

And now to answer the riddle I tweeted this morning:   

You've probably heard the term, "March comes in like a Lion, and out like a Lamb". Well in this case, March would come in like a Bear (market), and go out like a Bull (market). 

Good Luck, AA 

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