MARKET ENVIRONMENT: by Woody Dorsey. Sentiment is coming in @ 2% Bullish. Stocks have extended their Ping Pong while preparing for the War Game being waged and wagered on. There is still a risk of Hyperinflation. No change: “Is Reality always so easily Denied? Yes. Always. A jittery market may be expected into early March.” Be wary of the 2% bullish today.
NEAR TERM: As noted: “The ‘February Fling’ Profile has already flung. This is a Risk Off market. March may bring a catharsis.” Weakness is relatively orderly so far. Don’t freak out.
INTERIM TERM: Reiterate: “An initial Interim low occurred. It is not definitive at all, as a more complex bottom, may occur later on. A more overt price catharsis may occur near the March Rate hike. That is coming up soon.” Prefer that Stocks respect the 4290 area but nothing is that certain. may
DORSEY MARKET SENTIMENT: Bullish Sentiment had been overly optimistic for a long time. It will still take considerable time to regain a real psychological neutrality. Sentiment got low in late January to allow for a decent price recovery. The ‘February Fling,’ brought back some optimism before Reality reined again. With only 2% bullish today coming after a nice break, surprises might be some flurries of strength into Month end?
MARKET SUMMARY: Equity Markets had some upside before becoming clearly confused and under real pressure. As noted: “Inflation is Rising and Rates are Rising. Everyone knows that. But do they really? Jerome doesn’t.” No matter what, troop movements and market games kept everyone off side. Hyperinflation is more than interesting. Don’ ignore it. Enjoy it. Later March will bring some clarity. Until then,, the carousel in the circus will keep revolving.
Trading Instrument (Gary Uses) My Trading Instruments are all based off of SPX numbers, but for long side trades I use (SSO) the 2x leveraged etf that follows the S&P 500 and when expecting the market to move lower, I use (SDS) the 2x leveraged etf that follows the S&P 500, it moves higher when spx moves lower.
TECHNICAL VIEW by Gary Dean: Today is the last time in our lifetime we will see 6 of the same numbers in a date 2.22.2022 It is said to be the highest vibrational day of the year and you should expect to feel magnetic, magical and in complete alignment. Unfortunately for Mr. Market, the only magnetic pull it is seeing is to the downside and is in complete alignment with the bears. But I am seeing buy signals and Woody’s sentiment is at extreme bearish levels.
With support just below, I am more on the side of CAUTIOUSLY building a long position. I THINK we will see that magnetic pull down to the 4300/4290 support, where I would look to take a 1/3-1/2 size position and then wait and see if the 4230-ish level gets test to fill that trade. It can be managed pretty conservatively by putting a 1% stop from average entry price. Risking 1% for a possible 3%-5% reward fits my trading profile. It may not work, but things are lining up for one of those face ripping short squeezes.
No Changes-but a break of 4225 would most likely throw out buy signals on the daily chart. The bulls gave us a nice short squeeze up to the 50 dma where the bears yawned and slapped them back down to the 200 dma. Momentum is neutral and we have been stuck within a range (4815 top and 4225 bottom) with big moves in both directions. Until the bulls can clear 4600-ish, the bears will continue to try and push the tape down. If the bears can break through the 4225 lows, we should see 4050 in fast manner.
4290 is the support level I believe we will hit and as you can see, we do have buy signals in place. Be careful shorting down here and as I said, I am more inclined to use the 4290/4230 as pivots to buy with 4500-4600 as potential upside targets.
4310/4290 are the support zone and if the bulls fail to defend, we should test the 4225-ish lows. I am seeing buy signals on the 15’s as well. The bulls need to get price above 4382 to get themselves out of short term trouble
Summary: The bulls continue to show no signs of life, but seeing a break of the 4360 was expected to trigger some buy signals, which we are getting today. I like using this weakness/panic to start buying the dip at the pivots mentioned above. G
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