Strong Trends Die Hard

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Today we will be covering...

• Market Summary

• Technical Analysis

• Liquidity

• Sentiment

• Bitcoin

• Cycle Analysis of Major Indexes

• EW Analysis of Major Indexes

• VIX/VXX Update

• Forex

Market Summary

Major indexes have continued consolidating since Friday’s 1 March high. Based on multiple things we analyzed in the premium section, it is more likely than not that another short-term high is still ahead—possibly on Monday, 11 March, +/-. This would rhyme with the VIX cycle analysis I presented a few days back, which indicated that VIX might have a cycle trough around the new Moon, which falls on 10 March. It sounds exotic, but the analysis was very convincing.

The short-term analysis contrasts the intermediate- and long-term analyses, which suggest a reversal is due. Although multiple pieces of evidence suggest still higher for major indexes, lighting could strike unexpectedly around tops. Raising cash in overbought situations is not a bad idea.

My longer-term expectations do not change. I will repeat from the weekend report: “Despite the market's resiliency and FOMO, I expect a correction in the next 2-4 months, initially.

Market data as of 4 pm EST on 6 Mar. 2024.

Technical Analysis

SPX keeps respecting the trendlines. Also, it bounced off the “critical” 4948 level (red line). Below is the first indication that the trend has turned down. SPX is also above the trend-defining 10D EMA.

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Liquidity

The FED’s balance sheet increased ridiculously from 2009 and 2019. It declined about 15% last year, but it is still at very high levels. If the trend continues down it will have an impact on the market. However, this is not a short-term timing indicator.

Sentiment

Bulls vs Bears price action today.

Bitcoin

Bitcoin’s Fear & Greed has receded somewhat from high 80s but it is still high.

Bitcoin has been trading like a “wild animal.” So far, it has had three waves down and three waves up. So, more up is possible, although I do not have unsatisfied upper targets. It needs to drop below the gray FLD band to start generating projections down.

eBook: 3-Year US Stock Market Outlook

The stock market will exhibit significant volatility this year, IMO. To prepare for market swings down and up in the next couple of years, read our eBook about the stock market outlook for 2024-2026. To get it for FREE, share the link below with your friends, family and on social media and if 2 friends subscribe to BraVoCycles Newsletter using your link, as confirmed by Beehiiv, you get our 3-Year US Stock Market Outlook eBook FREE! We’re excited to share more of our content with your friends and family and the cutting edge technical analysis in our eBook with you.

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