The denial from the #dumbamericadown sales pitch, which used “millions & millions”, “tremendous tremendous”, “bad bad”, finally was admitted publicly yesterday after President Donald Trump told the Wall Street Journal he thinks the currency is getting “too strong.” Gold spiked to new 1-Month/YTD highs as the U.S. dollar fell to 5-day lows and nears the YTD lows due to disbelief in Trump’s ability to produce on his campaign promises which are being amplified more due to his flip-flop decisions about NATO now.
The VIX is at multi-month highs as France, Syria, Turkey and the country that is so FUBAR could be the headliner of the world this weekend:
As geopolitical tensions about Russia & U.S. in Syria & cyberspace adds another chapter to the 60 year old book and now North Korea gains center-stage attention, with anticipated missile launches expected this weekend to commemorate the “Day of the Sun,” the 105th anniversary of the country’s founding President Kim Il-sung, which falls on April 15 – Saturday.
Foreign journalists in North Korea were told to prepare for a “big and important” event Thursday, yet here we are and the air is still somewhat OK to breathe outdoors.
Earnings season kicks off today with JPM, C & WFC reporting before the market open. The obviously weakened USDollar will have some affect on the bank’s reports due out between 6AM and 8:30AM and the early portion of next week, but it’s a mixed bag of sentiment and chart plots that have entering into the 2nd half of April a Heads or Tails coin flip.
- April is and has been the STRONGEST month for the S&P 500
- April’s STRENGTH has typically come in the 2nd half of the month
- Q1, 2017 earnings are expected to be > Q4, 2011: BEST in 5+ years
- Thus far, SPY is -0.75% from the 235.80 April start
- The declining channel since the March 1 highs is in its 6th week
- SPY closed -2.19% from the March 1 (adjusted) All-Time Highs
The main support on SPX, 2336, HAS ACTED as support throughout this 6-week decline, despite the major gap down MAR 27 whereby SPY rebounded back to that 233.07 line. The main support throughout the last 9+ months has stemmed from that FEB 11 – BREXIT line which has now reached upward ABOVE SPY 236: $2 above last night’s close.
Trump’s comments about the USDollar did nothing to help the downtrend to change which brings attention once again to the upcoming BRADLEY DATES (April 17 (19/100 Bradley Siderograph Power) – April 19 (59/100 Middle Terms Power) which makes that SPY 233.07 line that much more important to watch for and also the SPX 23.6% retracement, 2326.12 (SPY 232.79) and the 161.8% extension from the FEB 11 – BREXIT pattern, 2320.41 – levels we saw briefly visited on the Mar 27 gap down (SPY 231.61).
My Take: We break above SPY 238 into the end of the month/first week of May
SHOULD THIS FAIL…
The SPX 38.2% retracement from the MAR 1 Highs and the BREXIT – Election 100% extension each fall in the SPX 2280 – 2282 area (SPY 228.30). A decline to this would be the lowest we should see IF IN FACT we do decline further as it equals a -5% move from the March 1 highs. That would bring SPX & SPY to the JAN 6 highs.
Smart money would sit on the sidelines through the weekend and/or begin looking out 1-3 months on SPY 235 – 237 – 239 CALLS which “should only fail” if Kim, Donald & Vlad decide to start playing Battleship this weekend.
Adding some insult to injury, France’s elections in 10 DAYS which could lead to a FRUCKOFF or FREXIT has become more than a unicorn as someone made a major move yesterday, buying 10,000 JUN 16 VGK 49 PUTS @ 0.85 just in one transaction shortly after the market opened yesterday. It’s well worth mentioning that the poor volume Vanguard Europe ETF also has larger Open Interest on the JUN 47 & 48 PUTS.
You also have the referendum voting this weekend in Turkey (kinda part of the EU but not Euro) which could provide President Recep Tayyip Erdogan sweeping new “superpowers.” For those unfamiliar with how their passport works, Turkey’s land borders are Georgia, Russia, Iran, Syria, Bulgaria, Greece and Armenia.
SPY This Week
Note: these R1, Pivot, S1 & S2 lines are from Monday