Folks,
Market Observations for the Week: The over-the-top Trump rhetoric towards Iran on Tuesday told us that a turn was close so we bought some TQQQ and SBSW. On Wednesday, the SPX gave us one of its biggest rally days and every sector was up except for energy. If the SPX can take out 6805, a move to an ATH at 7150 is possible but we are cautious. Our work is focused on another potential low around 4/20-4/21 and we feel that oil prices could remain elevated for months – by just surviving, Iran is getting the best of the US. The US/Iran war has got a shaky cease fire for now and crude oil is back to $97. Our view is that the process of negotiations will take some time and markets will begin to price in more inflation in the short term. Signs of credit risk, illiquidity, and the obvious geo-political risk are warning signs here for the broad market which may have entered a bear market in February. The SPX took out the December low and that is bearish. It is important to keep powder dry until we see a larger VIX spike above 40 and we haven’t seen that yet. The leadership of the SPX has shifted from the XLF(financials) which topped in January to the XLE(energy stocks) which are both late-cycle sectors in a topping bull market. Silver and gold bounced into the 4/1-4/2 Full Moon – we still hold a core position in the junior miners. The XLE is in a seasonally strong period(Jan-Apr) and is still favored in our work for 2026 – we also like the MOO ETF(agricultural). Our current investment positions were updated on the 4/7 close: 20% cash, 0% SLV, 20% QQQ, 10% MOO, 10% GDXJ/SILJ/XLE, 20% XOM/CVX/SLB and 20% physical gold/silver/platinum. We have a 25% overall allocation to our short-term trading account which was last updated on 4/7 to include: 35% cash, 10% QQQ, 10% CDE, 10% Barrick, 10% SLB, 25% XOM/CVX/COP.
TURNING POINT DAY
Our turn window for this week is 4/6-4/7.