Hello everyone! Today i want to share some macro analysis with you!
1.
I will be concluding my bearish outlook in the immediate term— pain has been effectively felt. The mindset must again shift towards a relief rally— one that could grow legs.
Active fund managers have aligned positioning with the fear sentiment. From my observation this combination works well to mark local bottoms.
I will discuss this in further detail on my Sunday note. $SPDR S&P 500 ETF Trust(SPY)$
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2.
$S&P 500(.SPX)$ Can we trade lows or lower again, simple answer is yes.
However, the mindset for me is to shop this range and avoid becoming paralyzed by any media market headline panic.
It is good odds that a rally transpires through mid May. I am not saying all time highs. Say rally to 5700-5800. This is a meaningful advance in the cards. From there the rally can be evaluated as either (1) very strong relief or (2) a foundation for longer term bullish outlook. That bridge can be crossed then, for now it is collecting the piece of the pie from lows through 5700-5800.
One leg at a time. My system has traded well the decline from February signaling market risk on Feb 21. The two relief rallies in mid March & early April also well called. I am now confident and will position for a third stronger advance. If we are fortunate to see a dip towards the lows, it is a shopping spree I intend to take.
5250 - 4800 big shopping range.
3.
Should the markets revisit the lows it will precisely shake this leveraged product buying retail crowd out. Unfortunately I feel this is much of X these days.
When the S&P 500 trades 5200 - 4800 to rattle this cage, my shopping cart will be ready.
4.
Anyway, I have prepared my outfit for the next time the market progresses towards or breaks the current lows. The mindset shifts towards monitoring the formation of a bottom with a very strong relief rally to follow (15-20%).
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