Folks,
Market Observations for the Week: The SPX bounced for a few days from late Monday into Wednesday, but the RALLY IS CORRECTIVE. Today’s Full Moon is a big turn window in our work and we are looking for lower lows in the SPX into the next week. We saw many money managers on CNBC dumping CVX and XOM and rebuying the Mag-7 stocks – WRONG. The US/Iran war is continuing and no cease fire is in sight. The price of crude is rebounding after Trump’s address Wednesday night that was lacking in any new specifics on the war. 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. 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 Easter holiday weekend 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 – we are looking for the GDX to show relative strength against the SPX. 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 4/1 close: 45% cash, 0% SLV, 0% DIA, 10% MOO, 5% 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 4/1 to include: 65% cash, 0% SLV, 0% CDE, 0% Barrick, 10% SLB, 25% XOM/CVX/COP.
TURNING POINT DAY
Our turn window for this week is 4/1-4/2.
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