To get caught up to speed; see the weekly wrap-up I blogged on Sat.
Weekly wrap-up Financials, Zombie Banks, Tech, China, and a CME
Market futures are higher as expected, with several bank stocks leading
US Futures Rise as Banks Rally; Treasuries Dip: Markets Wrap yahoo
Saw this coming, or course
While everyone else is worried about the #banks, and trusting the #FakeNews, we're going to be watching, trusting, and #trading, the charts pic.twitter.com/nKLChoLTiw
— Veteran Market Timer (@3Xtraders) March 26, 2023
Financials are only up 2% in upmarket, so I doubt this is a sustainable rally
Market Futures
One thing I wanted to mention this morning, is the divergence between the $SPX, and $SPX futures, which I first noticed last week, and drew attention to in a tweet, last night.
How can $SPX market futures be trading above 4000? S&P itself closed around 3972. pic.twitter.com/wxL5l9PyNA
— Veteran Market Timer (@3Xtraders) March 27, 2023
Futures markets don't always match up, but this is a pretty extreme divergence. Not sure what it means, but I suspect some sort of manipulation?
Taking a closer look at $SPX ES1 (futures). A 30 minute chart shows its trending lower, and we certainly could see another washout, below the 3800 level.
The tech sector continues to rally
$SOX leads tech, so that's the sector to watch...
$SOX 10 min. chart view. looks like we're in wave 4, which could last the rest of the week.
That would set up for a final push into wave 5 next week, as new money get's put to work in April.
I think the hedge funds are going to want to lighten up on their short positions, ahead of the Passover holiday, and that gives the bulls the perfect opportunity to take profits, on relatively light volume/volatility.
We could even see tech continue to hold up as retail short sellers are squeezed, ahead of April OPEX. Short covering could even continue into Memorial Day.
A new bullish sentiment indicator
Total asset on money market funds, reaches all time record. How 'bout that for a contrarian indicator!
— Veteran Market Timer (@3Xtraders) March 24, 2023
When I heard this news reported on Friday, I immediately moved 401k money out of the safety trade - where it's been sitting for the past 2 months, and back into riskier assets.
There's still the possibility of another shakeout, but the longer term trend remains higher.
Head Fake Rally Confirmed
If you recall back before this correction began, I predicted that the market was trading in a head-fake rally - in wave "b"?
That wave "b" can be confirmed on the financials chart below.
What does this mean? Probably means that we're going to see a powerful wave C rally in financials, before we see another crash later in the year.
Take Care, AA
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