Week of May 19 - NDX/VIX/10y/Oil
New record highs on indexes!!
The DJI broker 40k, and
NQ1!
itself broke to nATH as well.
YM1!
never actually made a nATH, but cash
DJI
did - so I wan waiting for that to resolve itself.
The good news is that
NQ1!
has a really clean weekly chart here, so I will be focusing on that this week instead of the Dow.
I think we are entering the final blow-off phase of the markets where we could see a final up leg that takes us vertical to 50k on the Dow, 7k on SPX, and 22k on NDX. That said - I still see Q4 as being super weak, but the market wants to go higher and it will get its wish with the VIX and bond market helping along - but I will cover that later.
Nasdaq
Last week, we made a nATH which is great. From HERE - I want to see a pullback on
NQ1!
to around $18k. This is a weekly FVG as well as ~50% pullback from the ATH. This will also satisfy our ERL -> IRL move.
Once we take that out, we can see a weekly Fib projection of 19.6k - and at that point I think they would just muscle this thing to 20k.
VIX
Our poor baby
VIX
- what have they done to you!? Friday was OPEX so I was expecting to see them pin price somewhere as they drained the VIX dry - and thats exactly what they did.
VIX nLOY - and we almost swept the 2023 lows which is a 4 year low. The TRAP in all of this - is that I do NOT want to be looking for Longs with a VIX that is at multi-year lows. I want the VIX to pop to help pressure indexes for a normal pullback. The faster the pullback and the higher the VIX - the sooner we can get on with this final leg of a 40 year bull market.
Bonds
I have been watching the 10yr note really closely as it looks like rates are going to backtest higher before resuming lower. A slight backup in rates, along with a VIX pop, SHOULD give us the needed pressure on indexes to get a proper pullback to buy. The longer term picture is still much lower for rates from here as the economy continues to weaken. Stocks won't care WHY rates are dropping - at least not for a while.
So long as we have a low-ish VIX, and bonds are bid - the indexes (especially tech) will FLY higher.
Oil
Oil FINALLY gave us some weekly context we can start leaning against. Oil is starting to march lower and this week was just the pullback into a weekly IRL level. From HERE, I want to see Oil continue to march lower on the weekly. This will continue to ease inflation - which will drop rates - which will bid bonds - which will allow indexes to FLY. Everything is starting to align for a final leg up in a parabolic - exactly what David Hunter has been talking about.
So here is the setup I am watching for this week;
Until next week - We'll be watching.
The DJI broker 40k, and
NQ1!
itself broke to nATH as well.
YM1!
never actually made a nATH, but cash
DJI
did - so I wan waiting for that to resolve itself. The good news is that
NQ1!
has a really clean weekly chart here, so I will be focusing on that this week instead of the Dow. I think we are entering the final blow-off phase of the markets where we could see a final up leg that takes us vertical to 50k on the Dow, 7k on SPX, and 22k on NDX. That said - I still see Q4 as being super weak, but the market wants to go higher and it will get its wish with the VIX and bond market helping along - but I will cover that later.
Nasdaq
Last week, we made a nATH which is great. From HERE - I want to see a pullback on
NQ1!
to around $18k. This is a weekly FVG as well as ~50% pullback from the ATH. This will also satisfy our ERL -> IRL move.
Once we take that out, we can see a weekly Fib projection of 19.6k - and at that point I think they would just muscle this thing to 20k.
VIX
Our poor baby
VIX
- what have they done to you!? Friday was OPEX so I was expecting to see them pin price somewhere as they drained the VIX dry - and thats exactly what they did.
VIX nLOY - and we almost swept the 2023 lows which is a 4 year low. The TRAP in all of this - is that I do NOT want to be looking for Longs with a VIX that is at multi-year lows. I want the VIX to pop to help pressure indexes for a normal pullback. The faster the pullback and the higher the VIX - the sooner we can get on with this final leg of a 40 year bull market.
Bonds
I have been watching the 10yr note really closely as it looks like rates are going to backtest higher before resuming lower. A slight backup in rates, along with a VIX pop, SHOULD give us the needed pressure on indexes to get a proper pullback to buy. The longer term picture is still much lower for rates from here as the economy continues to weaken. Stocks won't care WHY rates are dropping - at least not for a while.
So long as we have a low-ish VIX, and bonds are bid - the indexes (especially tech) will FLY higher.
Oil
Oil FINALLY gave us some weekly context we can start leaning against. Oil is starting to march lower and this week was just the pullback into a weekly IRL level. From HERE, I want to see Oil continue to march lower on the weekly. This will continue to ease inflation - which will drop rates - which will bid bonds - which will allow indexes to FLY. Everything is starting to align for a final leg up in a parabolic - exactly what David Hunter has been talking about.
So here is the setup I am watching for this week;
- I am looking for indexes to start a pullback this week led by NQ. Any pullback I expect to be fast and sharp - so that nobody can capitalize on it. Set your alerts - I am looking for ~ 18k on NQ1!
- I want to see the 10yr sweep the highs of last week, and then continue to march lower. This added pressure from the Bond market will weight on indexes.
- I want to see oil start a march lower from here. The next weekly target for me is down around 75.6
Until next week - We'll be watching.
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