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Monday, March 27, 2023

Market Update 3/27/23

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 
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.  

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 

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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