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.
JUNE E-MINI S & P 500
S & P ANALYSIS FOR WEDNESDAY: (3/27) Market stalled under 2680 and missed the upper target of 2686.75. We had thought it would hold up until at least early Wednesday. It could still be a B-wave, which means that it still could do a C-wave up to 2685 before turning down again. Watch 2588 overnight, as if that gets triggered, we won’t find a good risk/reward to get in. The bearish pattern suggests stall at 2620 and then double-bottoming at 2596, and then doing some kind of 3-wave bounce. Hence, there may be one quick sale overnight but can’t count on follow-through. Market likely to be erratic on Wednesday. Best guess is a retest of 2596 overnight, and then a 3-wave bounce on Wednesday, and then a plunge on Thursday to new lows.
CYCLE SYNTHESIS: Sharply lower and then bouncing part of Wednesday; lower into Thursday; closed Friday; lower into April 2-3.
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