It was a very rough start to the week in equity land, the SPX breaking a new multi-year low of 3975, and settling -3.2% to 3991. Meanwhile, WTIC settled -$6.68 (6.1%) to $103.09.
sp’weekly2
WTIC daily
Summary
SPX: the series of lower highs and lower lows continues. With 4K lost, next stop is the 38% Fibonacci of 3810. That is clearly viable within the next few days. Any bounce will be prone to getting stuck around 4K. Primary target of the 3500s is on track, whether just before end month, or a more realistic early/mid June.
WTIC: oil was largely dragged lower by the main market. Still though, its impressive that whilst the SPX has lost 4K, oil remains sustainably high near/above psy’ $100. The energy companies have little to be concerned about… at least in the s/t.
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Looking ahead
Tuesday has no econ-data of significance due.
Earnings: PTON, NCLH, WKHS, BHC, CRON, SOFI, RBLX, OXY, TTD, COIN, U, WYNN, RKT
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PF chart of the day
I will again highlight the computer PF target of SPX 3551, which is ‘curiously’ effectively also my target.
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Final note
Heyline and Weinstein, on the increasingly powerful trend of ‘the new current thing’. The latest example being the swing from C19 to Russia/Ukraine, then to Elon/Twitter, and now the ‘Roe’ issue.
The speed at which ‘the current thing’ is changing, is both astounding and disturbing. Its a relentless ‘quickening’ of the news cycle.
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Didn't I call this as well?
The UK Govt' will do this… or the cities will (ironically) burn. https://t.co/H3OoWY0UdH— Philip Calrissian (@Trading_Sunset) May 9, 2022
In addition to rising food prices, the UK populace face a monstrous problem this winter. I don’t say it lightly, but either the Govt’ wire everyone (at least $1000 or so), or it’ll turn Mad Max.
Even if that is done, many millions will struggle to afford basic food, as they will still have to let their homes go cold.
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Shortly after posting that, Burry (once again) deleted his Twitter account. I’m sure he’ll be back.
Q. Is a 85/95% drop now underway?
My view is simple.
Either the fed ‘back off’, or 3500 won’t be a key low, and instead it’ll just make for a wave’1 down. If that is the case, then a subsequent multi-month bounce to around 4K, and then a grander collapse to the 1500s.
Of course, if the Fed do back off, cut rates, and spool up the printers, that would be real bad for inflation.
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I actually watched Ep’1 of ‘Strange New Worlds’ last night. It was better than expected. The cast is really good.
The notion of WWIII has long been touted in many of the different Star Trek series. There are some out there who are longing for it, not least within the EU. Germany, and a number of other European states are in a proxy war with Russia, and they seem fine with increasing the geo-political tensions, beyond anything we’ve seen since even the 1960s.
Either the political/policy path changes, or (if you’re in a major city), you’re going to need Sarah Connor’s ‘two million sunblock’.
Goodnight from London