GOOGLOur support level produced another bounce on Monday. Should GOOGL break below this level, we might see it head much lower.
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GOOGLOur support level produced another bounce on Monday. Should GOOGL break below this level, we might see it head much lower.
BABA is the heaviest component of HTI. If it fails to recapture the uptrend support line, it risks testing the 120 level.
HTI1! I warned HTI (Hang Seng TECH Index Futures) was heading lower last week. It's now sitting on a key support level. If it breaks, it opens the door for a retest of 4.2K.
SOXX We might have seen the top in SOXX (Semiconductor ETF), as the final leg does not require completion. If I am right, we should see it halved, which is the same magnitude of drawdown I am expecting from NDX.
PLTR (Palantir) is resilient to Friday's tech selloff as the narrative around its software being used by the U.S. military in the current conflict between the U.S. and Iran continues. If it doesn't fall below 155 and continues to grind higher in the coming days, 170 is the next resistance.
XAUUSD
Gold remains supported by the lower channel and horizontal support at 5.1K. As long as it stays inside the channel, it should be fine. The probability of heading lower increases each day as the war drags on.
SPX NDX NVDA
Equities thrust higher yesterday on hopium for another TACO move, with NDX now up and SPX almost flat since the beginning of the war. When the market realizes the war won't be concluded in days or weeks, it should reverse sharply. SPX remains supported by the key 6.8K level and was pulled back from the uptrend resistance by the close yesterday. A retest of the breakout is usually a good entry spot, with stops just within the channel. Remember, the major move comes after we break these key levels: SPX=6.8K, NDX=24.2K, and NVDA=167.
Equities remain exceptionally strong, though this isn’t entirely unexpected. Trump has always used the same tactics, which can be summarized as max pressure before negotiation to achieve the maximum possible. Simply put, Trump doesn’t want war, he wants a deal. And with the midterm elections approaching, elevated gas prices would be devastating. Trump promised to push gas below $2 per gallon, so he not only wants a deal, he wants it fast. Otherwise, equities will reprice higher inflation, which Trump can’t tolerate. He watches the market closely and pumps it whenever there’s a meaningful drawdown. The market has learned this. We saw a full recovery on Monday and a meaningful recovery yesterday, and again equity futures are green as I’m writing this despite a worldwide equity meltdown overnight. I’ve traded many wartime markets, and frankly this is the most manipulated one. Be patient, my dear subscribers. Once the key names break below the key levels, no rhetoric can salvage it.
SPX opened below the key 6.8K support level but managed to climb back before the close.
NDX broke below the uptrend support line that has lifted the index countless times over the past month, but it remains above the key 24.2K support level.
XAUUSD A break above 5.4K opens the door for a retest of the ATH around 5.6K, and a break below the lower channel support opens the door for a retest of the major trendline around 4.7K.
KOSPI (Korea Composite Index) has continued to pull back since my warning on 02/26.
CL1!
Trump tried to calm the market by ordering the U.S. government to provide maritime insurance, and said the U.S. Navy would escort tankers.
So far, there's no sign of any tankers crossing the Strait of Hormuz since his announcement. Lloyd's List wrote, “The US Navy told industry officials that no naval assets were available to escort commercial shipping.”
SPX NDX CL1!
Equities remain exceptionally strong, though this isn't entirely unexpected. Trump has always used the same tactics, which can be summarized as max pressure before negotiation to achieve the maximum possible. Simply put, Trump doesn't want war, he wants a deal. And with the midterm elections approaching, elevated gas prices would be devastating. Trump promised to push gas below $2 per gallon, so he not only wants a deal, he wants it fast. Otherwise, equities will reprice higher inflation, which Trump can't tolerate. He watches the market closely and pumps it whenever there's a meaningful drawdown. The market has learned this. We saw a full recovery on Monday and a meaningful recovery yesterday, and again equity futures are green as I'm writing this despite a worldwide equity meltdown overnight. I've traded many wartime markets, and frankly this is the most manipulated one. Be patient, my dear subscribers. Once the key names break below the key levels, no rhetoric can salvage it.
CL1! Crude hit and pushed beyond my 71 to 72 target.
A break above 80 to 85 signals further upside toward 110 to 120.
VIX (Cboe Volatility Index) exploded as I expected. But yesterday's move is nothing compared to the true volmageddon I expect once equities break.
Q：Hi Sean, is it worth shorting NQ1! and NVDA at current levels?
A：Terrible risk/reward as NDX has not broken below the key level, meaning it could still act as support. For ES1! and NQ, a good short entry was when SPX hit the downtrend resistance line last week, and for NVDA, it's 192-196. Our NVDA short was entered around this level, before I stopped updating positionings in real time. We'll get plenty of short opportunities when it turns into a true bear market.
XAUUSD was trading above 5.3K when I was writing today's piece, and it's now trading a little above 5K.
Happy Lantern Festival!
SPX NDX
Indices rebounded from our support levels and once again closed above the key uptrend support line. Note that the more times a support is tested, the stronger it becomes, and the stronger the cascade once it breaks. I expect the indices to break as early as later this week.
DXY Next target is 100.
XAGUSD Gold pulled back from the major resistance around 5.4K as expected.
Silver continues to lag gold, as it couldn't hold above the key 90 level for even half a day and has now retraced back below it.
I warned this repeatedly in January, but it's worth saying again: gold tends to outperform pre and post crisis, and trades like a risk asset during a crisis.
As equities get ever closer to the breaking point, once the floodgates open, nothing survives, including gold.
The only thing that can go up is USD/DXY (U.S. Dollar Index), and perhaps oil if the conflict escalates. And I do think the market is underpricing the odds of this conflict turning into a years long war.
HG1! Copper has gone nowhere since the beginning of the year. As I mentioned before, it's sitting in no man's land.
For bulls, a break above the upper channel signals significantly more upside, while a break below the horizontal support and mid channel around 5.56 opens the door for a retest of the lower channel.