Recap
❌ IWM 200 was lost last week
The big picture is that recessions leads to disinflation → deflation and that’s not happening but getting back to 2.0% target inflation will take much longer than the market expects. The Fed keeping rates longer is not a problem, the problem is if the Fed flips hawkish and telegraphs future rate hikes.
Macro FUD is coming back into the picture and even with healthy earnings season the Macro FUD can take over and keep fear/VIX elevated.
New 52-Week Highs vs New 52-Week Lows
NYSE New 52-Week Highs: 64 vs New 52-Week Lows: 59
Nasdaq New 52-Week Highs: 55 vs New 52-Week Lows: 211
Nasdaq continues to see more new lows than highs.
McClellan Oscillator
New Highs - New Lows
*This my personal blog and is not investment advice—I am not a financial advisor but a random person on the internet who does not have a license in finance or securities. This is my personal Substack which consists of opinions and/or general information. I may or may not have positions in any of the stocks mentioned. Don’t listen to anyone online without evaluating and understanding the risks involved and understand that you are responsible for making your own investment decisions.
Macro FUD
Biden has put pressure on Netanyahu to call off any retaliatory strike—if this ends up happening, the sell off from Friday is going to bounce. However, key levels have to get recovered (see below), otherwise the bounce is just that—a bounce.
Nuclear Macro FUD
The Iran-Israel conflict is likely going to deescalate (for now—things can escalate into a greater war between both countries later because Israel really wants to destroy Iran’s nuclear programs) and the spike in the VIX to 20 will offer a dip buying opportunity; however, VIX continuing higher and higher since Dec 2023 should not be ignored as the market is start to price in and hedge—could it be the escalation of conflict in both Russia-Ukraine (if Russia attacks Ukraine’s nuclear power plant it could trigger Article 5 in NATO—France to other NATO countries are building up their military because of the US reduced sphere of influence due to a deadbeat US Congress) and Middle East escalation that will affect global oil markets. This will bring Maco FUD right back into the picture and the supply-side is going to make the Fed’s job against in getting inflation back down to 2.0% that much harder.
The Bullish Perspective once Macro FUD is out the way
Cam Hui shared a few posts that give good food for thought
Forecast
VIX is now on an upward trend since the spike in Feb then last Friday’s higher spike—fear seems to be coming back into the market.
IWM losing 200 was my line in the sand and it was crossed last week—you guys have known that if we see a weekly close below 200, it is a bearish price action signal. When looking at technical and flows/GEX analysis, now is the time to be cautious but it will still be a dip opportunity coming up—check levels below.
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