Folks,
Market Observations for the Week: The SPX made a high for the week into the 4/1-4/2 Full Moon and then pulled back into Thursday. On Thursday’s close we saw signs of extreme fear in our option indicators. With Trump’s over-the-top rhetoric over the weekend against Iran, we are looking for a potential trading low early Monday in the SPX and GDX. News on the US/Iran war is calling the shots on global markets and the SPX could still test lows going into 4/20-4/21. The US/Iran war is continuing and no cease fire is in sight. The price of crude is testing $115 Sunday evening. 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. However, Trump’s vulgar rhetorical blast against Iran may be telegraphing another TACO moment (turnaround) moment for the global financial markets early this 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 bounced into the 4/1-4/2 Full Moon – we still hold a core position in the junior miners –the GDX is showing relative strength against the SPX here. 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 4/2 close: 50% cash, 0% SLV, 0% DIA, 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 4/2 to include: 45% cash, 0% SLV, 10% CDE, 10% Barrick, 10% SLB, 25% XOM/CVX/COP.
TURNING POINT DAY
Our turn window for this week is 4/6-4/7.
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