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Today we will be covering...

• Market Summary

• Technical Analysis

• Volatility - VIX

• Sentiment

• Bitcoin or Ethereum?

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• Cycles of Major Indexes

• EW Counts of Major Indexes

• VIX/VXX Update

• Bonds

• Forex

• Let Us Know Why You Like BraVoCycles

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Market Summary

We have been waiting for the end of negative February seasonality, early March positive seasonality and a market pop. We got that late Thursday (anticipation of March 1 buying) and March 1 buying by pension funds. Could it extend for another 1-2 days? Yes, it could. A few indexes have targets higher between 0.5% and 3%. But cycles and at least some Elliott Wave counts are warning us that a turn is around the corner. It could start any day now. Below SPX 5048 and into the 2/22 gap would be the first indication that a top of significance has formed.

Despite the market's resiliency and FOMO, I expect a correction in the next 2-4 months initially. Raising cash on the rips is not bad when the market is overbought.

Market data as of 7 pm EST on 1 Mar. 2024.

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Technical Analysis

The two amongst most speculative financial instruments, Bitcoin and TQQQ (Proshares 3X QQQ Bull) are highly correlated. What does this suggest? Maybe this should go to the sentiment section?

The total Put/Call Ratio is very low. This suggests at least a technical correction.

SPX monthly technical divergences. Two consecutive closes above the upper Bollinger Band (BB). It typically revisits the lower BB, which is now below 3,500 and falling. But this is not a precise short-term signal.

Volatility - VIX

While SPX has been making new highs since December, VIX has been making higher lows. This positive multi-month divergence suggests a multi-month correction in SPX.

Green arrows mark new Moons every 29.5 days. As one can see, VIX tends to bottom around new Moons.

Lunar eclipses are marked with the red down arrow. Some people observed that there is increased uncertainty, volatility around these eclipses. A recent article suggests that analysts are more pessimistic about earnings projections around lunar eclipses:

Lunar eclipses, analyst sentiment, and earnings forecasts: Evidence from China

In any case, these are exciting ideas to study. VIX spectral analysis using two methods reveals periodic components of 20 and 22 trading days (TDs). The average of the two estimates is 21 TD, which is approximately 21*7/5=29.4 calendar days (CDs). Fairly close to 29.5 new Moons cycle. So maybe there is some “secret” connection between new Moons and VIX cycles.

Sentiment

How do you explain very pessimistic consumer confidence in the chart below?

My guess is most ordinary people do not own Bitcoin and Magnificent 7.

Puzzling chart anyway, it looks like the sentiment in real economy is a mirror image of the one in the financial, or speculative markets.

Maybe an answer, in part, to my dilemma above is how much people spend on servicing their mortgages. If households spend >35% of their income on mortgage payments, there is not much flexibility with the remaining budget.

Or maybe this one is also a partial explanation related to excessive mortgage payments due to the rise of interest rates.

How about credit cards?

Bitcoin or Ethereum?

I posted this ETHBTC cycle composite last week in the premium content. Thought it could be of interest for everyone.

Long-term, multi-year cycles favor ETH. The 40-50 TD cycle dominates swings for possible trading.

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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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