Weekly Report

Remember it is options expiration this Friday and a quadruple witching so we could start to see some odd market behavior. TLT has bounced off the lower end of our support range. Back above 88.30 targets the 92 area.
GLD and SLV should be a good bit lower by the end of March, and possibly April as well.

We are seeing some oversold readings that have not done much good for the upside. The equity markets may be shifting from a trading range to a downtrend.

In terms of our forecast, we still look for a decline into April/May, with the strong possibility of the pullback starting in late March.

More downside from here implies our forecasted correction is starting. Realize that in bull markets not all stocks bottom at the same time, but also realize, we have to follow the indicators with the idea we are fully invested around April expiration.

So far, we are basically right on market direction – down but stronger than anticipated. If TLT holds 88 it is still short-term up, and above 90 would be strong. A close below 462 would imply more downside for GLD, which we expect by the end of March.

Below 600 on QQQ and 675 on SPY (SPDR® S&P 500 Trust), closing basis, which would suggest the correction is starting. TLT closed above 90, so our next target of 92 looks possible. It could happen in the next few days, if investors look for a safe haven.

Corrective behavior is likely to start in earnest when QQQ starts trading and closing below 600, and so far, we have held that area. We continue to foresee more problems into the April to May period but will monitor the indicators to see how this is working out. TLT continues to test the 90-area, and ultimately should go through and test 92 or so, by summer.

While we think that tech is due for a bounce, we are not at all sure this sector will have any sort of outperformance over the next few months. The oil market is in an interesting position, as favorable seasonality has ended, but stocks and oil remain relatively strong due to world events.

If this decline materializes according to our forecast, it should be choppy and difficult to trade, but end up lower in mid to late spring. Our conclusion here is that the five- and ten-year rates have more pressure to decline, based on the charts. However, even the thirty-year rates look lower chart wise. If INDA can move above 55 it could test 60 or even higher. Follow the indicators and use risk management, but if the Nikkei is where the US market was in 1984, there is a lot more upside.

In our view, these are snap back rallies in stocks like PLTR and should end this week, then resume some downtrends next week. TLT has started to rally. We continue to look for some more upside, say to 90, where we would reevaluate this unit. GLD and SLV were up Monday but down Tuesday. There should be more upside here, but if these continue to pull back this week, there could be downside without an intervening rally.