LIVE Market Update 4/11/2024
Latest recap:
The Pullback Has Started
March CPI Too Hot VS PPI Too Cool
Market Sentiment: Greed has gone, fear to be next?
Trade Idea: Short The Nasdaq With The “QQQ”
S&P 500 Levels - S: 5180 or 50MA; R: 5260 or 10MA/20MA; 5120 is next
MY BULL/BEAR RATIO: BEARISH BIAS
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The Pullback Has Started
Traders, the pullback just has started. The almighty CPI number that came out yesterday shocked the markets as now it gets clear to even the guy who lives behind the moon that the Fed has to take action and this only means as of now rates will be higher for longer. In other words, there wont be any early rate cuts.
Because the markets priced in a June rate cut and 3 in total for 2024, the dissappointment about the latest CPI reading will lead to a market adjustment and that only means we are doomed to go lower from here. I am not calling for a crash but rather a healthy pullback of up to 10% to bring down overbought market conditions and to set the stage for another rally thereafter.
How long this pullback will last? According to market history, it could last from 2 weeks up to a month. This means between now and May. If you need levels, I highly recommend you to buy my research report that I was working on two weeks ago.
March CPI Too Hot VS PPI Too Cool
Finally we are over the latest inflation readings from March on the CPI and PPI - and oh boy, what a nasty surprise it was on the CPI that came in on each possible number hotter than expected!
And the answer of the markets followed promptly by a massive move to the downside as it is now clear that the Fed has to tighten temporarily losening financial conditions. Although we also got a PPI update today that “surprisingly” came in cooler than the CPI, its not going to have the same impact as the CPI despite the bounce at the opening today.
The CPI is so crucial to the markets and the Federal Reserve money policy that even President Biden could not resist to comment on the CPI update from yesterday while giving a press conference in Japan. He insisted that overall inflation has come down by 60% and because this may offset the high March CPI, and by the way, it was the 3rd hot CPI reading in a row, he is sure there will be a rate cut.
I mean let sink - the President of the United States says there will be a rate cut coming in 2024 - this put the so called Federal Reserve Bank independency seriously into question and also Fed Chair Powell in a very bad spot.
Nevertheless, the market now has to digest these bad news that is really bad news along with the potential market shock event that can take place over the next 3 days when thinking of the Iran/Israel conflict in the Middle East. The question now is can earnings from big banks and big tech save the markets from a deeper pullback with all these bad developments forming?
Market Sentiment
Traders are getting cautious again - greed has gone and fear is likely to be next!
Trade Idea: Short The Nasdaq With The “QQQ”
The market pullback is in the work right now and overbought tech stocks are doomed to get sold into that pullback.
Although I must admit that the Nasdaq (tech heavy) chart still looks very bullish, it shows first signs of a crack when watching key indicators such as the MACD on the daily that is already in the negative territory followed by the weeky MACD that is turning negative now. Short-term moving averages are also pointing to a short-term reversal.
Of course nothing comes with a guarentee and market forces could be tempted to save the markets from dropping - but as of now and more important, based on the potential Middle East escalation that is imminent, there is a good chance the markets worldwide to respond negative.
Note: This is no investment advice, only for educational purposes!
Live S&P500 Futures - Pre-Market Analysis
Now traders finally got the signals they have been waiting for - the market is rolling over now and technicals are proving that.
But traders be aware - when certain levels are achieved during drops, there will be massive spikes following. For example, if the 5180 support/50MA will be reached today, there is a good chance of a massive market bounce before the market might continue to fall again.
I am out today and wont be updating tomorrow - but the direction over the next 2 weeks are clear - to the downside, especially with geopolitics to enter the next stage of escalation (Middle East).
Levels to watch S: 5180 or 50MA; R: 5260 or 10MA/20MA; 5120 is next support
Pro Bullish:
New ALL-TIME-HIGHs!Bullish momentumAt the daily 20MAAbove the daily 50MA, 100MA, 200MA
Above the weekly 10MA, 20MA, 50MA, 100MA, 200MA
Above the monthly 10MA, 20MA, 50MA, 100MA, 200MA
10/20MA daily goldencross
20/50MA daily goldencross
20/100MA daily goldencross
50/100MA weekly goldencross
Strong Fourth Quarter of 2023
Strong First Quarter of 2024
Strong January Month of 2024
Strong February Month of 2024
Strong March Month of 2024
Price Target: 5,100-5,200 ACHIEVED (Wall Street Consensus for 2024!)
NEW Price Target: 5,500 (Oppenheimer Wall Street Bank March Update)
Blow-Off Top: 6,136
Pro Bearish:
Market at risk to roll over
Bullish momentum stalling
Long-term trendline break confirmed!
Wall Street’s 5100 price target for the year 2024 already achieved!
Wall Street’s 5200 price target for the year 2024 already achieved!
Market Sentiment at EUPHORIA level
Below the daily 10MA
Below the daily 20MA
10/20MA daily deathhook
Weakening bullish momentum / Bearish momentum
Potential bearish head and shoulders pattern forming
Geopolitical Risk: Middle East Crisis / Ukraine Crisis
Currency Risk: Japan’s Yen Currency, US-Dollar crisis looming
MY BULL/BEAR RATIO: BEARISH BIAS
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Have a happy trading day and weekend!
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