evening wrap

market vibes

March 4…)

Today was a classic turn-around Tuesday. Stocks, bitcoin and even oil rallied from oversold levels and negative technical conditions. Gold came in higher and held its gains. The Yen fell and bonds fell.

By the late afternoon, NDX (chart below) was up on the day after trading as low as October 2, 2024. Volume was high for a third day. Although a recovery of the 200 was a positive development (finally), it was very brief. Sellers were quick to pounce and prices fell swiftly the lows and settled mid-range and well under the 200 Day MA for a second day. Tomorrow is another day.

Serious technical damage has been done to these stock index charts and it’s going to take time to repair it… and quite possibly lower prices.

Post election equity longs that held patiently for months without any gains were either stopped out or sold out this morning as prices penetrated the 200 day MA. The lows had that feel of “any price possible.” It will be interesting to see open interest in S&Ps tomorrow ( chart below).

The Dow held its 200 MA on high volume and a notably weaker final 5 minutes than NDX and S&Ps. This doesn’t feel like its over although the determination of support to stave the selling does feel familiar.

What my gut tells me is people are leaving for many different reasons, debts to pay, taxes to pay, wild political and economic news but, the most obvious to me is the promise of a new bull for months didn’t happen and that hurt… Losses like this hurt.

In other markets…

Metals and oil were mosty quiet, apart from a mid day rally in oil and silver. Bonds and Yen are joined at the hip lately and they both were weak from the get go. For whatever reason, probably Yen carry worries, USD/JPY is the one FX pair that should be fundamentally weak and it’s not at all weak.

Europe ccys were very strong moving the dollar index down 1000 points today (chart below). Why? No clue.

my vibe

The only show worth watching lately is the stock market and it’s been fun having real ranges to trade. Unfortunately the financial establishment doesn’t make money on “trading”. They make money crushing vols and collecting premium decay and theta. So enjoy it while you can.

I’ve noticed a consistent pattern of thin but aggressive buying in the final 30 seconds of the formal sesion during the post close. I call it close banging because that is what exchange compliance and CFTC prosecutors called it when they fined humans for influencing the settlements during the closing ranges. If you’re patient you can almost always sell (not buy) at much higher prices than the last 5 minutes. I found this useful.

In the news during the session after three separate episodes of promising and reneging, Zelensky said he wanted to sign the deal again. I think Starmer and Zelensky make a lovely couple. Don’t you? As for tariffs, the simple arithmetic is lethal for Mexico, Canada and Europe.

China has cards.

Good luck in Asia…

JJ

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Market vibes is not a registered investment advisor, and comments are for informational use only. Any mention of a particular security, index, derivative, or other instrument is NOT a recommendation to buy, sell, or hold that security, index, derivative, or any other instrument.