Market Update 4/5/2024
Latest recap:
Let The Pullback Begin!
Jobs Report Is Killing It & Early Rate Cut Dreams Too
TRADE IDEA: SHORT SMCI 0.00%↑
Market Sentiment: Bull sentiment got hammered, fear’s coming back!
S&P 500 Levels - S: 5180; R: 5260 or 20MA, Next support at 5210 or 50MA
MY BULL/BEAR RATIO: BEARISH BIAS
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Let The Pullback Begin!
Up until yesterday's midday trading session, the markets seemed unstoppable. Despite inflated valuations and overbought conditions, traders, buoyed by a sense of greed and confidence in the Federal Reserve, shrugged off warnings. This sentiment was particularly bolstered after Fed Chair Powell's dovish stance earlier in the week.
However, the day took a sharp turn, with major indices, including the Nasdaq (as reflected by the QQQ ETF), witnessing a significant downturn. This wasn't entirely unexpected, given the bearish chart patterns forming since the start of the week, notably a trendline break. This technical signal, long-awaited, was awaiting a catalyst to confirm a short-term bearish outlook.
Setting aside the cacophony of mixed messages from the numerous Fed speakers, with their alternating dovish and hawkish tones, the real market-moving events were elsewhere. Significantly, escalating geopolitical tensions have begun to mirror in the spiking gold prices. The unfolding events in the Middle East and Ukraine have reached critical points, threatening global stability. Notably, NATO's increased involvement in Ukraine and the recent controversial actions of Israel in Syria are alarming developments, straining international relations and legal boundaries.
These two regions are edging closer to severe conflict escalation, potentially leading the world towards a precipice of a third world war. The gold market has been hinting at this for weeks. Now, the broader markets are reacting, with investors increasingly anxious. The confirmed trendline break and pronounced red sell signals on the charts are unmistakable indicators for market analysts worldwide.
Unless there's an unforeseen positive development today, it's time to brace for significant market turbulence. Prepare for a potential downturn and consider safeguarding your investments.
Jobs Report Is Killing It & Early Rate Cut Dreams Too
Friday’s job report was just released and comes in much hotter than expected, blowing out any expectations. This confirms overall job related data from the rest of the week that were coming in as expected.
This data surge led to a notable increase in the 10-year Treasury yield, which jumped by 7 basis points, reaching 4.381%. This rise comes close on the heels of the benchmark note's recent peak, when it briefly hit a yearly high of 4.429% on Wednesday. Similarly, the 2-year Treasury yield also experienced an uptick, climbing by over 2 basis points to stand at 4.665%. It's important to remember that yields and bond prices have an inverse relationship.
This only means that the early rate cut dream the markets priced in for June has basically died. Now the market has to adjust for the rate cut pushback and this only means we are likely seeing more selling over the next couple of days!
TRADE IDEA: SHORT SMCI 0.00%↑
AI stocks are now forming a very bearish chart pattern and to me it appears that SMCI is the king of all bearish chart patterns right now.
Play it with weekly options (but very very risky!) or with monthly options (risky but less volatile like weekly) to bank on potential gains.
In my humbe opinion, it could get to the 50MA near 872. But thats only my personal opinion. If you trade it, you are statistically better off locking in profits when 30% has been exceeded. The most aggressive guys are going for 100% to 400%.
Reminder: This is no investment advice but just for educational purposes!
Market Sentiment
The good times are over for now. Realization is coming back and traders getting more confussed now.
Live S&P500 Futures - Pre-Market Analysis
Finally it happened, the long awaited pullback in the markets are very likely now.
The long-term trendline break was confirmed yesterday and we have a very bearish sell candle.
The current price of the S&P500 also moved below the 20MA increasing the odds for more downside in the very near term.
Trader may be better off shorting any bounces rather than buying dips especially with the weekend now coming and war likely to escalate in the Middle East.
Levels to watch S: 5180; R: 5260 or 20MA, Next support at 5210 or 50MA
Pro Bullish:
New ALL-TIME-HIGHs!Bullish momentumAbove 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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