The Days That Changed Everything

The stock market is trying hard, trying to ignore what is going on around it:

The widely publicized Economic Growth Hope..

The Unfunded Tax Cuts…

The Tariffs…

FED interest rate policy…

The Sanctions…

and Peak Cycle earnings..

As outlined yesterday, the initial reaction is playing out in commodities because that is the easiest place for the remaining funny money to test the waters.

Maybe stepping back and putting numbers on when the accumulative effect of these factors became relevant makes sense.

What jumps out are these two days, January 25th and March 14th. These days are: 1) market pivot day, 2) and the day the composure of the yield curve changed.  See charts here:

 

The bottom line is simple for us, things have changed and market players are using the S&P 500 to try and test the March 14, 2018 high of 2779 (for the F-2 Fracture Chart this would be the 0.018 – 0.024 area). That test is in play at the moment with the push up into resistance area of 2670 to 2770.  At the same time the fear trade is in retreat, i.e. gold, and is backing off a bit.  We expect these challenges and backoffs to fail, maybe well short of the max.

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