Folks,
Market Observations for the Week: The SPX was hit hard again on Friday and looks to open down again early Monday. The price of crude is driving the markets as the US/IRAN feel each other out on a dialogue of talking points. Our view is that the process of a ceasefire will take some time and markets will begin to price in more inflation in the short term – the gold stocks actually rallied on Friday, and gold and silver actually held their 3/23 lows while the SPX kept going lower into Friday. 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 SPX down leg into the 4/1 Full Moon before the next oversold bounce. 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 3/23 – 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 3/27 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 3/27 to include: 60% cash, 0% SLV, 10% CDE, 10% Barrick, 10% SLB, 10% XOM/CVX/COP.
TURNING POINT DAY
Our turn window for this week is 4/1-4/2.
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