NFTRH; Falling into place…

No pun intended with the title, but it appears that the market’s excuse to fall once again – as was eventually likely on this bounce – came on the heels of a more human and in the words of one reporter in the room, “scared” sounding president. The media tell us what’s moving markets, but this was a bounce to begin with and the SPX favored target is in the 2030 to 2100 range.

The question had been ‘will the bounce be contained at the EMA 20 or the noted resistance above in the 2730 to 2830 range?’. April is set to open with SPX dropping from the EMA 20 for a test of the previously noted short-term support around 2450.

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However, SPX did close March well above the 38% Fib at 2351, so I am not going to proclaim that 2030 is in the bag by any means.

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From the excellent (and recommended) website Hedgopia, comes this view of risk vs. reward having risen with the market bounce. It is in line with the Sentimentrader risk summary we viewed last weekend in NFTRH 596. Short-term market risk had risen by the weekend and continued to do so into Tuesday. So a market pullback is normal. The question though is whether it is a bear market bounce failure.

The market’s trends are down until proven otherwise, so it is best to respect the current trend as the driver.

Finally, I wanted to update the ‘green shoot’ view on a future inflation problem (again with the qualifier that it is very early times and speaking of trends, the macro trend in force is deflationary not inflationary). But you’ll note that the Silver/Gold ratio is still in bounce mode although it is logically fading a bit this morning with the market’s stress. However, silver is still above 14 after closing March in that condition and commodities are not as weak as stock markets. It’s still not much, but there it is anyway. We have to begin tracking somewhere and this is that somewhere.