Folks,
Market Observations for the Week: The SPX and the PM sector got hit hard on the rise in crude oil prices and the news from Iran. The bounce in the SPX and PM sector from Monday is being reversed down with lower lows ahead. AS we predicted Tuesday night, we saw the SPX trading under 6500 and probably heading to 6200. 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, and we are wary of another more SPX down before the next oversold bounce next week. 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 peaked on the 3/3 Full Moon and were then sold down into Sunday evening – we still hold a core position in the junior miners which we have tried to hedge with IWM puts. 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 3/10 close: 60% cash, 0% SLV, 0% DIA, 10% MOO, 5% GDXJ/SILJ/XLE, 5% 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 3/24 to include: 90% cash, 0% SLV, 0% CDE, 0% Barrick, 10% SLB, 10% XOM/CVX/COP.
TURNING POINT DAY
Our turn window for this week is 3/23-3/24.
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