Category: Financial Markets Update

FOR WEDNESDAY: (4/4) Seems like it could be a repeat of last week with a strong Tuesday bounce and then stocks fall apart again. Have to get short stocks again and the other 1-day retracements will be followed by a continuation of the trends from Monday.Continue reading

FOR TUESDAY: (4/3) Tuesday is the best day of the week for a stock market recovery but new lows are coming so will have to get short any absurd bounce that happens and be ready for the rest of the week. That should give gold a pause and the dollar has a 5th wave high to do and crude needs a bounce.Continue reading

FOR MONDAY: (4/2) The long weekend can’t come soon enough for traders, as initial Tweets about hurting Amazon were taken back and techs soared 2% to erase losses. Trade was horribly thin on Thursday and may not mean much but finding places for new shorts on stocks is tricky.Continue reading

FINANCIAL MARKETS OVERVIEW
FOR THURSDAY: There‘s so much background noise going into the weekend and coming out of the weekend that it’s hard to imagine anything positive happening. Action on Thursday was wild both ways with position squaring and did not make much sense, particularly in the dollar. What is clear is that stocks are going to break the first few weeks of April and we have to get short and survive the computer trading. Not sure we have to or want to take much home but it will be difficult to position without better risk/rewards if you’re brave.Continue reading

FOR WEDNESDAY: We got busy and when we looked up the market had suddenly returned to levels seen at Monday’s lows. Tough to pin a catalyst in this flush – which has pushed S&P red and Nasdaq down hard – but a combination of NVDA’s drop, TSLA’s tumble, 5Y auction tail, and FB comments, seems to be stalling the bounce. Cycles are particularly bad for NQ through mid-April and between Facebook, and soon to be Twitter and TSLA, and there’s big trouble in River City and more is likely come. We stayed short stocks on our ETF timer with SDS, as we knew the other shoe would drop into mid-April but we had thought we had another day to nibble at shorts.Continue reading

FOR TUESDAY: Sucker-punch Monday and suddenly everything is wonderful! May last another day but something bizarre will happen late in the week and into the long weekend. War and terrorism cycles are strong and it is something we do not want to predict but it’s edgy out there. Stocks will get spooked again quickly probably after early Wednesday.Continue reading

FOR MONDAY: Anxiety cycles are increasing into the Easter Holiday and may continue thereafter for a few weeks until Tax Day so it’s hard to find many cycles that would allow a stronger recovery over the next month. Stock market may be down so hard on Sunday/Monday that it has to do short-covering into Tuesday or part of Wednesday just to rebalance. Have to think that much lower numbers can come if the market is vulnerable into April 13.Continue reading

FOR THURSDAY: (3/22) Usually the FOMC movement spills over into Asia and Europe with follow-through. We can’t sell major support on the S & P but can buy dips on gold and sell the dollar.

JUNE E-MINI S & P 500
TRADING RECOMMENDATION: Wait for morning comments.
S & P ANALYSIS FOR THURSDAY: (3/22) Wild ride. The trade wasn’t happy about rate projections for 2019 and 2020 and decided to sell the early rally, and tank the dollar and gold. We had gone into the week with a bias toward long metals and short dollar but got spooked and stopped on gold on Tuesday. Not sure what to make of the stock market and will wait for the morning.
CYCLE SYNTHESIS: Recovering into Friday.

FOR WEDNESDAY: (3/21) Trade waiting on FOMC. Here’s what key analysts think:
The question then is whether the Fed will hike rates 3 or 4 times in 2018 and 2 or 3 times in 2019. Here opinions differ, and as Morgan Stanley writes, based on our stress-testing of the dot plot, it is possible to get to a full median of 4 hikes in 2018, particularly if the Chair moves, “but we think it is too early in the year for the FOMC to agree more tightening is needed, particularly in light of continued uncertainty about just how much tightening the first full year of balance sheet shrinkage will deliver. Also, having over-promised and under-delivered on rate hikes in 2015 and 2016, we think the FOMC will be reluctant to raise the median path too aggressively early this year and risk a repeat scenario—at least at this meeting.”

OVERALL: Anxiety cycles are increasing into the Easter Holiday and may continue thereafter for a few weeks until tax day so it’s hard to find many cycles that would allow a stronger recovery over the next month. The best cycles for a strong bounce could come from Wednesday into Friday but it would take a dovish FED doing 3 rate hikes and not 4, Trump backing off on China, and a magical budget coming together. That seems too much to ask.

FOR TUESDAY: (3/20) Too much news this week with the G-20 finishing, FOMC on Wednesday, new Chinese tariffs on Friday and fighting over the next budget going into the end of the week. Add saber-rattling with the UK and Russia and political punches from both sides still trying to take down or protect the President, and it’s a bit of a mess. Tension cycles not done until April 2-4 so I suspect we have a lot more noise coming. Will favor logical trades here which means long gold, short dollars and short stocks but we have to tread carefully.Continue reading