top of page

Week of March 24

New all time record highs!

Last Wednesday we had the FOMC and Powell. Powell has basically thrown in the towel on rate hikes at this point - inflation be damned.

Inflation is still ~3% which is 50% higher than their 2% target - but remember - The Fed controls NOTHING and MUST follow the simple path of the 2yr rate.

I will cover interest rates in the first part of this weeks post as I think it will set the tone for what we are expecting moving forward. Swiss and Mexico central banks have already began their easing cycle and cut rates last week. Japan has abandoned its yield curve control as they basically own 70% of the domestic JGB market - and the Yen is now approaching 30 year lows so its a GREAT time to go to Japan for USD based travelers.

The 2yr has officially rolled over;

Bonds are going to be a great long term investment to hold through the other side of the next crash.

The 2s/10s spread is still inverted - we are continuing our record duration and depth of this. It will continue until it doesn't - but the spread hasn't moved basically since October.

The 10yr broke down through its 200dma on Friday. I am looking for the 10yr to drop another 4-5% or so to the 4.04% area to then see the reaction - but losing the 200dma isn't typically a good sign.

So the short version of this all is I am expecting the stock market to make its final move into its final generational top. Global markets from the FTSE in London, the Nikkei in Japan, the CAC in France, the German DAX and the US based SPX - all are at record highs. Germany and the UK are in official recession to boot!

Basic fib extensions point to 21k for the NDX before any kind of meaningful topping process.

Pretty wild to see 18.3k print on NDX when just 5 years ago it was 7k. And this was ALL brought to you by RECORD LEVEL DEFICIT spending. We are spending $1tn every 100 days - or $10bn PER DAY.

That is the KEY driver behind what is jucing markets.

DXY:  The funny thing about these dynamics is as global central banks ease - DXY is starting its accent. This will continue to apply pressure to oil and other commodities.

DXY on the daily is breaking out and showing a bullish market structure shift.

Energies: Oil has now printed a shooting start candle pattern on the weekly chart. I expect Oil to begin its march lower as the DXY climbs, and also as global demand for oil eases as the globe slips into a recession. Lots of folks got long oil but as you can see, it looks like they will close the monthly candle inside this FVG as we continue the march lower

So here is the setup I am watching for this week;

  • Rates to continue to drop - providing index bulls fuel to mussel the market higher. We are seeing a rotation back and forth between DJI and NDX - I am looking for a dip to buy on DJI this week as well as NDX.

  • Looking for DXY to continue rising - this will pressure commodities even as Gold printed a new high last week.

  • Looking for oil to start to continue lower driven by the monthly chart and rising DXY.

Until next week - We'll be watching.

1 view0 comments

Recent Posts

See All


bottom of page