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Saturday, May 3, 2025

Extensive Saturday Market Update $SPX DCS Charts Still Bullish?

Wrapping up week 2 of our post-Easter rally:  

I find it amazing that the same people who helped trash the market during a 4 day market crash in April, by stoking fear over Trump's tariffs, are now seen egging on a "historic winning streak". So disingenuous!

 CNBC  - trying to sell Pro subscriptions to newbie investors



Technically the market may have been up 10 days in a row, but Monday, Tuesday, and Wed., we saw little to no gains.

Wednesday was exciting, as the market dipped at the open - on a negative GDP print.

Here's the Dow rallying off the 20 day moving average. 

 


$SPX Daily Candlestick Chart - See the moving average targets on this chart. As of Friday's close we're getting close to the 200 day moving average, and the NYSE is already there! 

Very orderly buying as I predicted 2 weeks ago

Comparing this rally to the October 2022 rally 

Similar looking shakeout, followed by a similar rebound. The trajectory is basically straight up. Although still nothing "historic". If the $NYSE can rally another 700 points this rally will match the 20% gains we saw back in Oct 2022.      

 



Europe  

European Stocks have seen a historic, meteoric rise! 

The folks at Bloomberg are actually rooting for European markets, and the hedge funds behind the scenes.

Hedge Funds

 

Gains in leveraged ETF's also compound, if you can manage to stick with the winning side of the trade.

 What Next? 

It's going to be interesting to see if markets are going to crash into the next Federal reserve announcement, and May Options Expiration, or will we see a long period of consolidation, once the top is confirmed?

Tops in a bear market tend to reverse violently, while interim tops - between waves A and B - for instance - can consolidate for a long period of time. 

Scenario #1 

Now that the bears are trapped I would expect them to remain trapped, going into the Summer, as talk of a China deal persists. We'll call this the, "buy the rumor", trade. 

We're also seeing the market rally on bad news, and a fear of missing out, although you always see this sentiment in a bear market rally, and especially in wave 2.


Scenario #2 (which I happen to think is far more likely) 

We could see a run for the exits ahead of the Summer.    

We're already seeing rumors of Jeff Bezos exiting his own stock, and NVIDIA is still left to report!

  

Still Bullish?

 There is a 3rd option, and that's that we're still in a bull market, and if you find yourself in that camp, and you like counting Elliott waves, then I suggest you follow someone you may remember from our yahoo (2008 crash) days Daneric's Elliott Waves (blog)

To be honest I can't rule out a continuation of a bull market, but I don't believe we're off to the races just yet. 

Getting back to Option #1

Using the $NIKK Japanese Nikkei as an example of what we could see over the next few months, as we wait for Trump's 90 day tariff pause to run out, and deals to be announced. "Buy the rumor"

 Looking back at the Yen Carry unwind, back in August, you can see the market held up for nearly 4 months, after the initial rally. Probably in order to collect on bullish Call options, placed months out. 

NIKK - Crashes in August, and consolidates for several months, before retesting the lows.  


At the time of the August crash, the financial lame stream media went out of their way to NOT report on what really caused the catastrophic August crash - a massive, and sudden unwind of the $YEN/ Carry trade.  

If that crash had happened on Trump's watch, no doubt they would've found a way to make him the scapegoat, as they did, when the rug was pulled for a second time in January 2025.

I suspect what happened in Japan in August was a shot across the bow.

I suspect the next Fed meeting could provide a near term capitulation point for global markets.   

GL, AA 


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