MARKET ENVIRONMENT: by Woody Dorsey. Sentiment is coming in today @ 23% Bullish. So, the Fed tightened. Okay. Done. Yet, it is far from over. This is a Tightening Campaign. War continues to be waged. The overall profile fits with the potential for a Hyperinflation. The 03/14 low came in as planned and now choppy trading into 03/23 where another round of selling is scheduled to hit into the 04/14 low date.
A potential trading low was profiled in this time frame. I had allowed 4/4ish as a final trading time target. So, allow more of a corrective bias before confirming an interim recovery. Wars never end well and no one knows how long they will last.
NEAR TERM: Erratic trade is still possible near term. This week has corrective potential. Stocks need to further develop the interim low before more believable upside occurs. Give it until month and quarter end.
INTERIM TERM: An Interim low has been nearing, as expected. This weakness has been finishing up. This profile is for an exciting but spastic April recovery B4 Summer Topping, B4 a ‘Fall Fall.’ The larger profile has given signals that a more durable corrective process may last longer than anyone expects.
DORSEY MARKET SENTIMENT: Bullish Sentiment had been overly optimistic for a long, long, time. Sentiment is now still discovering what level of pessimism is required to achieve a decent interim low. We have been getting close. Thus, we are in the zone.
MARKET SUMMARY: Equity Markets remain under secular pressure. Central Bankers are grappling with a Hyperinflation. They still don’t understand. Volatility and Uncertainty aren’t going away. Expected: “A trading low is forming. Enjoy it.” War never ends well nor will 2022.
TECHNICAL VIEW by Gary Dean: I was warning about the bullish divergences on the daily chart and sticking on the short side. Well the warning is now playing out and we are seeing a mad scramble to cover short positions. I am seeing signs that the bulls are low on gas, as we are seeing divergences on the NYAD as well as the 60’s. It may NOT be the big one on the downside, but I am expecting a 100-200 point spx pullback in the coming days/weeks. It could turn into something else on the downside, but for now, lets set expectations on 100-200 point drop. Leave the door open for 4600-ish to come into play.
The bullish divergences was the warning sign for the bears to cover up or get long. Whoever was waiting for the crash is now looking at great gains that have turned into losses. If history is our guide, they will switch the bulls camp just as we are about to head lower. 4520/4598 is the resistance zone to build short positions for the next leg lower.
There are some bearish divergences forming on the 60’s and resistance is right above. I was looking for 4500/4600 as upside targets to start shorting. Here we are. But the bulls will continue to fight (don’t know why) until the bears take the spx below the 4366 support.
Summary: The easy money has been made on the upside. Now expect some choppy tape and we scrape out of top in the coming days/weeks. G
Information is for paid subscribers & may not be copied or distributed. © Copyright 2022. The information contained herein was provided by Sentiment Timing and/or its publishers does not make any representation or warrant with regard hereto, including but not limited to those of accuracy, completeness, reliability, timeliness and/or infringement on the rights of third parties. This Publication expresses a view on the markets but is not intended to provide any specific recommendation to buy or sell any security. Investing is Uncertain and always carries Risk. Of Losses. Subscribers should always assess Market Risk parameters with their broker or financial adviser.
Information is for paid customers and may not be copied or distributed Copyright 2022