If these new MACD and PMO crossovers hold, and if the RSI holds below 50 on this daily SPX:VIX ratio chart, we could see a decent pullback occur in the SPX.
Saturday, April 10, 2021
- in the wake of the Biden administration's spending spree, to date, together with their monumental proposals of rebuilding or "re-imagining" America, post-COVID-19 pandemic, at a cost of $Trillions more (e.g., the "Green New Deal"),
- if negative consequences occur after Biden's proposed tax hikes are passed by Congress,
- as taxpayers try to cope with the rapidly-escalating costs associated with the unprecedented influx of hundreds of thousands of illegal immigrants flooding across the southern border each month (many of whom have COVID), as well as drug cartels and drugs, gangs, sexual predators, terrorists, and human traffickers, that began post-Biden election and is now described as a humanitarian crisis, a national health crisis, and a national security crisis by border agents, Governors, mayors, and sheriffs of bordering states and towns, as well as members of Congress...attributable to Biden's new border and ICE policies. It's being completely ignored by the President and Vice-President (VP Harris was put in charge of this issue by Biden), and neither one has even bothered to visit the border and speak to these front-line experts about this catastrophe,
- etc., etc., etc.
The National Debt is already over $28 Trillion, and rising fast, especially with President Biden's out-of-control spending agenda, costing trillions of additional dollars.
I can't predict the timing of such an event, or identify its catalyst, but I think we'll see another catastrophic blow-off top happen in the banking sector in the not-too-distant future...judging by the steepness of, and rabidness associated with, the current parabolic spikes. The risk is there..."caveat emptor."
Of note, these three global threats are bubbling in the background and may produce major fireworks sooner than we think. How will Joe Biden respond...indeed?
The following charts show that the rapid increases in the price of these bank ETFs and stocks formed during the full throes of the pandemic, from March 2020 (when the economy, jobs, healthcare, personal spending, etc., tanked, and hundreds of thousands of people died from the virus and other health problems resulting from mass lockdowns across the country and around the world).
Time will tell whether these parabolic price rises were attributable to sound judgement based on assumptions of a quick, sustainable economic rebound, or whether it was shaky speculative investing based on an overestimation of a rapid recovery...e.g., did they invest heavily in Bitcoin (check out the parabolic increase from March 16, 2020 to the high in March of this year..."The Emperor wears no clothes!").
The following monthly chart of the S&P 500 Index (SPX) contains the SPX:VIX ratio in histogram format at the bottom.
Typically, over the past four years, when the price on this ratio reached its current level, the SPX, either paused and consolidated, or pulled back...sometimes dramatically.
Furthermore, the SPX has spiked far above the +5 standard deviation of the long-term uptrending regression channel...a sign of extreme equity frothiness.
Keep an eye on this ratio for clues as to strength or weakness in the SPX in the coming weeks.
Thursday, April 08, 2021
Over the past several days, buying interest has resumed in US 10-Year T-Notes, after it fell below its long-term uptrend channel median, as shown on the following monthly chart.
Major resistance lies around 134.00, the channel median. A rally and hold above that level could see serious buying push the price to the channel top, currently around 147.00.
Otherwise, failure to retake the median could see price drop down to major support around 121.00, the channel bottom.
Keep an eye on the Balance of Power and Momentum indicators for clues.
The trajectory is parabolic on this monthly chart of the MSCI World Index, as Momentum begins to waver in the rally that began in February of 2020.
Is this sustainable? FOMO (fear of missing out) buyers may get burned as the exuberance tops out. Keep an eye on momentum for clues.
Wednesday, April 07, 2021
* See UPDATE below...
Price on this monthly chart of Coca-Cola (KO) is sitting just below the apex (53.50) of a large diamond pattern...typically a bearish signal.
Failure to rise and remain above this long-term resistance level could see a sizeable pullback, particularly if Coke's customers begin to pull back their buying of (what once was) the "pause that refreshes" soft drink...as Coca-Cola continues its recent political activism against Caucasians and its participation in extreme far-left "out-of-control cancel-culture" actions by individuals and major corporations against Republicans and Conservatives...and, even entire States, e.g., Georgia (one of 23 Republican-controlled states).
"In short, corporate America is making sweeping economic threats to states which pass laws designed to improve election integrity."
Monday, March 29, 2021
This monthly chart of FNGU looks ominous. There are only three trading days left in March, so we'll see where the March candle closes.
Until buyers step back in, with sustained conviction, into the 10 technology stocks making up this exchange-traded note that tracks 3x the daily price movements on an index of US-listed technology and consumer discretionary companies (AAPL, BABA, BIDU, NVDA, FB, NFLX, AMZN, GOOGL, TSLA & TWTR), look for the FNGU selloff to continue in April.
* See UPDATE below...
It looks like the buying in Japan's Nikkei 225 (JP225) began drying up in December, 2020, according to the Balance of Power indicator shown on the following monthly chart.
A drop and hold below 29,000 could see price drop rapidly to 24,000, or even 20,000.
Precisely what catalyst could cause such a sharp, swift selloff remains to be revealed.
Thursday, February 25, 2021
Wednesday, February 24, 2021
The US Dollar (DX) is hovering precariously just above a major inflection point at 90.00, as shown on the following monthly chart.
A drop and hold below that level could see the DX plunge to around 85.00, or even 80.00, in short order.
However, should the Financials ETF (XLF) drop, as described in my most recent post, we may see DX reverse course and rally towards 95.00, or even 100.00...keep an eye on the XLF for clues.
The rise of the Financials ETF (XLF) from March 2020 seems rather parabolic when compared with prior rallies over the past two decades, as shown on the following monthly chart.
A pullback may be just around the corner.
A drop and hold below major support at 30.00 could see this sector plummet to around 25.00, or, even 20.00, in short order.
Keep an eye on my post on the US Dollar as a cross-reference for clues.
Tuesday, February 23, 2021
The following pivot point calculations and chart are provided to illustrate a variety of support and resistance levels/price targets on the monthly timeframe for the S&P 500 Index (SPX).
The calculations below are based on the high/low/close of January's candle for February's levels/price targets.