Well, that was a nice try.
Yodi wanted pictures so here's the S&P's bounce lines. We haven't actually hit the 20% correction mark at 4,000 but, as long as we're stuck in the range betwwen the weak and strong bounce lines – we're most likely consolidating for a move lower The bulls hope we're going to form the 4th leg of a "W" pattern here and recover back to 4,550 but we're already in a broken "W" pattern off the Strong Bounce Line and conditions haven't changed (worse, actually) so why should this time be different?
Also note, as we predicted in our Live Trading Webinar last month, we're about to hit that "Death Cross" on the S&P 500 and that is BAD. Even though we could see it from literally a mile (and a month) away, it will still come as a surprise to traders and analysts, who use TA completely wrong on a mass scale. As I said at the time, if you understand HOW a chart is made, then you can predict what it will look like in the future. If you are GUESSING where the market will go based on the chart you see – you're doing it wrong.
Very simply, the 50-day moving average changes slower than the 200-day moving average and "slower" isn't just some vague notion – it does, in FACT, change at a pace that is 25% slower than the 50-day moving average so every day the market closes below the 200-day moving average, it drags the 50-day moving average 4x lower than it does the 200-day. Therefore, we KNOW how many days it will take before we get our crosses long, long in advance.
What does the Future hold? Well we have the Fed Meeting next week and inflation is out of control so it's not at all likely they don't hike at all and the market expects 0.25% and 0.5% would be a big negative – so there's no likely positive there. We also have PPI, Retail Sales, Housing Starts, Industrial Production and the NY and Philly Fed – hard to see any of those things popping us over the 200 dma so, if we assume we have another 7 trading days below the 200 dma – that is likely to pull the 50 dma below 4,450 – where we'll get our cross into Q1 Earnings – which are not going to be very positive either.
Then there's the war (don't mention the war!) and Putin blew up a maternity hospital yesterday so, needless to say, peace talks are not going well. Diplomats from Ukraine and Russia failed to reach an agreement on Thursday to reach a cease-fire or even to ease the worsening humanitarian crisis in Ukraine, dashing any glimmer of hope that Russia might soon pull back from a two-week-old conflict that has already killed thousands and displaced millions.
Will millions of people are trying to flee the country of 40M, the refugee situation itself is already becoming a disaster because every country has a few Trumpy types who hate immigrants, no matter how dire their situation is and Poland, who have already taken in 1.3M Ukranians, says that, without UN help, this will become a "refugee disaster". Poland has 38M people in it's country. They US, by contrast, accepted 15,000 refugees all of last year – down from 45,000 before Trump and his wall – and they think that is a National Crisis…
Meanwhile, this is what it looks like for a mother and her children who were too slow crossing open ground to try to evacuate. I'm sorry it's disturbing but it's important to remember all these policies we talk about have very real consequences for very real people and these are WAR CRIMES that are being committed by Russia – supporting their actions is… deplorable!
Hey, at least it's not a picture of the Maternity Ward Putin blew up. Are you not a terrorist if you throw the bomb from miles away? It is very sad to see how spineless the UN and NATO have become. We are still only giving the slightest aid to Ukraine – no direct military support of any kind. Clearly we have not learned a single thing since World War I – people in the 21st Century shouldn't have to live in fear of being invaded or bombed. We can stop this – we're just choosing not to.
Meanwhile, we watch and wait for the market to resolve itself but that looming Death Cross means it's not likely we'll be jumping off the sidelines in the next two weeks. We went over our hedges yesterday and they seem adequate but I do keep thinking I'd rather be in CASH!!!
