Topping or Topped?

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Today we will be covering...

• Market Summary

• Technical Analysis

• Liquidity

• Sentiment

• Cycle Analysis of Major Indexes

• EW Analysis of Major Indexes

• VIX/VXX Update

• Commodities

• Crypto – Bitcoin Deep Dive

Market Summary

Last night, I went out on a limb on X (former Twitter) and said the market is topping this week (see below). IMO, it might have, or it can make an additional push in the next 1-2 days to accomplish that. Based on SPX details, I think it is likely that SPX will attempt a new high. I am aware that it is almost impossible to pinpoint exact market tops with such surgical accuracy. Still, I wanted to point out what signals I am getting predominantly.

Tomorrow, quad-witching OPEX will likely bring the usual whipsaws.

Repeat from yesterday:

The short-term analysis is becoming more in line with the intermediate—and long-term analyses, which suggests a reversal is due. The lightning could strike unexpectedly around the tops.

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 14 Mar. 2024.

For my updates between newsletters, follow me on X (formerly Twitter):

This is what I posted last night on X (former Twitter). Let’s see if I will be correct after going out on a limb.

Technical Analysis

I posted the EW ending diagonal NDX chart yesterday. So far, it looks good. But there are other technical interpretations.

Head & Shoulders (H&S) is imperfect, but it could work.

Another technical interpretation is a Diamond Top. It is not ideal, but it captures the spirit of distribution-driven complex tops.

How do you like this bullish-looking inverse TSLA chart? Completing 5 waves up will eventually lead to a pullback in 3 waves, which means the non-inverted TSLA could bounce in 3 waves.

Liquidity

I mentioned the BTFP expiration a couple of times in the past 10 days. If the FED does not extend it, NDX, SMH, Crypto, … will suffer, IMO.

The difference between renter income and rent appears to have a negative impact on the stock market (liquidity) when the gap between the two is widening, like in the 2000-2009 period. Otherwise, it probably only has an impact on spending/economy. So, we should look for a widening gap as a yellow flag.

Sentiment

Active Investment Managers are extremely bullish – Historically, they have been wrong at extremes!

I posted the top 10% of stocks related charts 2-3 times in the last 2 months. But now the top 10% vs. the total market nicely exceeds the peak in 2029. We know what happened next. Hopefully, it will not happen again to the same extent.

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.

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