MARKET ENVIRONMENT: by Woody Dorsey. Sentiment is coming in today @ 4% Bullish. Markets have turned overtly corrective again? Will buyers show up again? Maybe? Maybe not! They don’t have to. They don’t have to keep ignoring the structural Tightening Campaign which still has a long way to go. The profile is still for a Hyperinflation. It is prudent to be cautious.
NEAR TERM: Stocks are at Risk again as the interim recovery cannot escape Reality: Stocks were deemed to be in a lazy indeterminate period with some upside potential into late April. Maybe not. Not so fast. There is no very well-defined near-term timing. So be Wary. Real Bears don’t scare easily. They can have their way, on their own terms, with their own timing.
INTERIM TERM: The Interim profile allows for recoveries but it may only resolve into an extended confusing Summer Topping process, B4 a ‘Fall Fall.’ There is nothing bullish about this market except that Big Bears typically take their time when toying with everyone.
DORSEY MARKET SENTIMENT: Sentiment recovered from panic pessimism. But the sentiment rebound registered vulnerable levels of optimism last week. What were they thinking? They were not thinking. They were feeling. Feeling like the War and Rate Rises were seemingly going to go away? Not so fast. Sentiment is declining again. As it deserves to do.
MARKET SUMMARY: Equity Markets remain under secular pressure. SECULAR. It is prudent to be cautious. Central Bankers will be grappling with the looming potential of Hyperinflation for a long time… Longer than anyone thinks. Repeat: “Volatility and Uncertainty aren’t going away. Embrace it.” The market could churn and range into Summer. There will be another leg down after that. War never ends well, nor will, 2022.
TECHNICAL VIEW by Gary Dean: The market has been doing EXACTLY as we have anticipated. With yesterday’s big move lower, we had the majority turn bearish just as we approached our downside target zone. I decided to move to cash and close my short position, but taking a long trade was just a little too risky for me heading into important economic data. The bulls used the support zone, bearish sentiment as well as buy signals to springboard off of those lows and are now stretching for resistance 1. I wouldn’t be surprised to see the 4600ish tested again, but let’s cross that bridge when we get there. For now, I am leaning on the side of buying dips.
The bullish divergences were formed, we were at the downside target zone and that had me moving to cash. I would LIKE to see some backing and filling and look to buy dips, but not chase. The bulls need to stay above the 4450 resistance and then use it as support to prove they are going to try for 4600. I am NOT against buying at 4450/4400 if it gives us the chance in the coming days.
The short term pivots are 4450/4550 resistance zone and 4450/4400 support zone. No changes, just targets being hit. Look to buy dips as we head into the bullish time period that should take us into late April.
Summary: The markets are doing what we expected. Our downside target was hit and as everybody looks to short this rally, buying the should work out, as these late bears will be used to springboard the markets higher. I would not be against using the 4450/4400 the area to buy. But there is time, so don’t chase! G
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Information is for paid customers and may not be copied or distributed Copyright 2022