GOLD: The Next Parabolic Bubble?

We'll see.

If we do see a blow-off in price at some point soon, perhaps 3000 will hold as support, since that was a technical upside target within the confluence zone of two major long-term Fibonacci levels, as per my post of December 6, 2022.

GOLD finally hit 3000 on March 11 of this year, for a gain of 68% -- and has nearly reached 3500 -- as shown on the following monthly chart.

P.S. Price briefly pierced through 3500 on April 22 before dropping back below during intraday trading.

GOLD Monthly chart

Will China's Shanghai Index Get Blown Out of Its "Froth," Again?

I wrote about China's Shanghai Index (SSEC) on August 22, 2023, as shown below.

I noted that, since March of 2007, any attempts to rise and stay above 3000 resulted in price being blown off numerous times to fall back into what I called a 'Chaos Zone' between 2000 and 3000.

It is currently trading above above this zone, after breaking above long-term intersecting trendlines, which offers a level of support around 3100, as shown on the monthly chart below.

Since early 2016, price has, essentially, held above 2700, which offers near-term major support.

However, the area in which it now sits is what I've dubbed as "Froth," inasmuch as it has never risen and held its gains since it ventured into it in early 2007...before the infamous 2008 U.S./Global Financial Crisis.

China has been around for over 4,000 years and has found ways to remain flexible and resilient throughout its long history...seemingly focusing on the 'long game' and its quest for 'win-win' solutions to problems.

In that context, I doubt whether it will crumble in the next four years because of President Trump's global tariff war and his 'I-win-you-lose' strategy. President Xi has been busy this week making trade deals with multiple Asian countries to mitigate the effects of Trump's tariffs. No doubt, he will continue to seek other alternatives and opportunities, as well.

So, should the SSEC hold above 3100, we may see it continue to rise. However, in the current volatile global environment, we'll see if it can, at least, remain above 2700...for the next four years (until the next U.S. federal election and change of President).

Should President Trump fail to reconsider his damaging global tariff policies before it's too late, the U.S. may end up reaping the fallout. He has likely created the 'world's biggest economic wobble' in modern history, while synchronously earning the title of 'untrustworthiness,' thereby creating a 'hostile environment' in the United States that would not foster any kind of fair and lasting trade partnership with other countries, nor attract new business from foreign investors.

* UPDATE April 24...

President Trump has been caught in more lies...this time by the Chinese, as reported below.

As I said, no one can trust anything he says...so, watch and wait for WRITTEN trade agreements, signed by both parties...before taking any meaningful action in the markets.

Until then, volatile whipsaw trading will continue, generated by more daily "fake news" headlines and preposterous claims from Trump.

Source: ZeroHedge

SPX ALERT: Potential Retest of 200 MA Along With A Death Cross Event

While it's not a guarantee, it's not uncommon for the the S&P 500 Index (SPX) to bounce after a significant drop and retest its 200 MA, following the formation of a bearish moving average Death Cross.

We may be at that point, as the 50 MA is poised to drop below the 200 MA in the next couple of days, as shown on the following daily chart.

As you can see, the SPX has plunged a great deal since it reached its high of 6147.43 on February 19 in connection with President Trump's global tariff war, before reversing and spiking following its low of 5069.90 on April 4. It closed today at 5268.05 in a very large and volatile trading range.

A spike to around 5750ish to retest its 200 MA is possible (and close the gap down between April 2 and 3), given that the RSI, STOCH, and MACD indicators are hinting of such a scenario -- and that volatility is extreme, as shown on the following SPX:VIX daily Ratio chart -- before resuming its downtrend.

With the drama of Trump's day-to-day tariff/trade flip-flops, anything's possible, so we'll see what happens.

SPX Daily chart

SPX Daily Ratio Chart

From This Week's "Smile File"...Skeptical Consensus 😏

Know anybody to whom this scenario might apply? 😏

SPX TARIFF FALLOUT: Where Does It Go From Here?

I've recently written about President Trump's global tariff war, and its effects on U.S. and global markets, here and here.

Today's article will focus primarily on the S&P 500 Index (SPX) and what may lie ahead for its potential targets.

The following weekly SPX chart contains two Fibonacci retracement drawings...one taken from the week of the March 23, 2020 low of 2191.86 and the other from the week of the October 10, 2022 low of 3491.58, both to the all-time high of 6147.43 from the week of February 17, 2025.

I'm mainly interested in where their respective levels overlap or are fairly close, generally speaking, following its dramatic price drop in the past several weeks, which may determine price targets, as well as support/resistance levels, in the coming days/weeks.

Price is currently sitting below a confluence of two levels around 5130 and 5200. The next confluence levels lie from approximately 4500 to 4630 and 4800. Further below, the next ones sit around 4050 to 4170.

These areas of confluence represent upside and downside targets.

Weekly SPX chart

The following daily SPX:VIX Ratio chart may help to provide clues relative to support and resistance levels.

The ratio price is nearing a previous Bull/Bear Line-in-Sand level of 100, after plunging below its current level of 150.

A drop to 100 (or overshoot it a bit) may coincide with a price drop of the SPX to around 4800, or so.

Should the ratio continue its slide towards the 60 historical/critical Bull/Bear Line-in-Sand level, we may see the SPX plunge towards the lower confluence levels from 4050 to 4170.

The question, of course, is timing, as to how quickly or likely such scenarios may play out. That is up in the air and depends on momentum and external factors, such as economic conditions, monetary policy, financial policy and conditions, and political, business and consumer influence/pressure.

At the moment, the 50 and 200 MAs are currently under the influence of a bearish Death Cross on the SPX/VIX ratio...so, until they reverse, the bears are in control of price action.

Daily SPX:VIX Ratio chart

Year-to-date percentages gained/lost by the U.S. Major Indices are shown on the following graph.

Nasdaq Indices have been hit the hardest, followed by Small Caps, then S&P 500 and 100, and, finally, Dow Indices.

U.S. Major Indices

Percentages Gained/Lost YTD

U.S. Major Indices

Year-to-date percentages gained/lost by the U.S. Major Sectors are shown on the following graph.

Technology is the biggest loser, followed by Consumer Discretionary, Biotech, Home Builders, Industrials, Financials, Energy, Materials, Health Care, and Utilities. Consumer Staples gained 0.34%.

U.S. Major Sectors

Percentages Gained/Lost YTD

U.S. Major Sectors

Keep an eye on Technology and Consumer Discretionary for signs of a slowdown or pause, which may cause markets, in general, to follow suit.

With respect to the Consumer Discretionary sector, keep an eye on the Kraneshares Global Luxury Index ETF (KLXY).

It's fallen 15.63% below its IPO price, as shown on the following weekly charts. 

Further weakness in this ETF could spell further trouble for U.S. markets, in general.

KLXY Weekly chart

KLXY Weekly % chart

All in all, markets are currently very weak, with Fed Chair J. Powell signalling this past week that economic conditions are weakening and inflation is on the rise.

Should President Trump fail to reverse course on ALL of his excessively punitive and damaging tariffs on countries around the world, we may see stagflation rear its ugly head in the U.S. -- and the SPX drop to around 4050 -- sooner rather than later (with daily plunges in global markets, like this past Friday's, as shown below)...before we see capitulation and reversal in U.S. markets.

N.B. In any event, what country's leader would trust him ever again to negotiate any kind of new trade agreement in good faith (and honour them), inasmuch as he just blew up all of them with these tariffs...and could do so again, on a whim? 👀

AND, he's given NO indication that he would remove these tariffs, even if new trade agreements were negotiated! In fact, he has already stated that they are permanent. 

How else would he be able to pay for his plan to extend income tax cuts and get Congressional approval to do so?

Global Markets April 4, 2025

Source: StockQ.org

FINALLY, I'd just mention that the U.S. MOVE Index (which measures the level of volatility in Treasury futures) has not yet spiked to historical highs, as shown on the following monthly chart.

Should that continue rising, look for stocks to continue to drop.

MOVE Index Monthly chart

Source: Finance.Yahoo.com

So, buckle up!

* UPDATE April 7...

U.S. markets paused by the end of the day, following volatile and extreme intraday whipsaw moves to the upside and downside, while Asian and European markets (et al) plummeted in overnight trading...some much more than others.

We'll see how long any deadcat bounce occurs in world markets, in general, before continuing another leg down.

As long as President Trump's tariffs remain in place on global markets, creating rising economic and business investment uncertainty/chaos, this scenario is a distinct probability.

Such extreme volatility is NOT a sign of healthy markets, especially in the U.S.!

TIP: Watch and wait for what Trump ACTUALLY DOES (confirmed in writing in, either, an Executive Order, or a signed trade agreement)...NOT what he SAYS he will do/is doing...to verify. BUT, then there's that TRUST issue that been forever damaged, regardless...🤔