3915 vs 4080

The markets are on the edge now no thanks to the banks which are showing signs of buckling under the stress of monetary tightening. US regional banks kicked off the spiral before a mega name in the form of Credit Suisse sent out an SOS and now as we all know, over the weekend had UBS buy them out in the biggest bank rescue since decades ago when the great recession hit markets real hard. There are echoes of that now and what is more worrying is the fact that inflation is still not well controlledyet. 

We have heard arguments by some that this might actually help tame inflation. Fair enough. But that is still a far shot and the FOMC really has some head scratching decisions to make. Continue the course till inflation really subsides or slam the brakes to avert a banking collapse. But wait for it.....at the risk of inflation picking up again afterwards and slamming the economy (and the normal people) hard. 

Technically, I believe the pivots are 3915 vs 4080 on the broad market index. In this kind of situations, there are just too much noise going around. So I believe the charts are the best place to analyse market sentiments and short term direction. On a micro level, Friday's price actions showed a five wave pattern down past the 3915 pivot and a 1-2, 1-2 classical pattern with the market in the possible midst of a third wave sharp move down is on the table. That I believe is the higher probability move based on recent price actions. 

A move up past 4080 negates this and gives hope to the bulls in the form of a bullish albeit weak diagonal. This move opens up a rally to the 4400 levels. Although at the moment I believe this is less likely, it is still possible especially if the Fed decides to surprise by pausing rate hikes (or even cut rates). But here is where the conundrum is. If the Fed does this, it only rings more warning bells. If they have to do this with inflation still strong, they will be indicating that the financial risks are too high in a way that the economy is probably falling off a cliff. Hence the need to reverse course. They also run the risk of reigniting inflation down the road which will fuel another run of price increases of necessities. 

Hence, I am letting the market decide where it wants to move. A sustained move below 3915 strongly hints at that C wave move towards the 3000 levels which I believe presents a fantastic buying opportunity. 

I also believe inflation is not out of the window yet and energy prices are on the verge of another run especially if the Feds decide to pivot. Buffet's moves to increase his energy holdings are another strong hint. 

As mentioned in my previous article, I have been very cautious early on and I still believe that there will be better opportunities to get strong Tech names such as AMD, Nvidia and Tesla down the road. I am shifting strategies to harness the market and investing some cash to hedge against another possible energy run and one name that I believe will outperform from here on is Enphase. 

Besides that small tweak, I will still be fully defensive and believe in a heavy cash position in this macroenvironment until price action indicates otherwise.

Thanks for reading my commentary!

Stay safe! 😊


$NVIDIA Corp(NVDA)$ 

$Advanced Micro Devices(AMD)$ 

$Tesla Motors(TSLA)$ 

$Mullen Automotive(MULN)$ 

$Semiconductor Bull 3X Shares(SOXL)$ 






# 💰 Stocks to watch today?(29 Mar)

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  • WernerBilly
    ·2023-03-20
    You seem to have a very different opinion. What time duration you are looking bearish?
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  • JohnMitchell
    ·2023-03-20
    4100 to 4200 might be a big pressure.
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  • Trevelyan
    ·2023-03-22
    Going off the cliff?
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  • JessieTheresa
    ·2023-03-22
    Wait for the buying opportunity ahead
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  • jgaldon
    ·2023-03-20
    awesome article  / thoughts,  thanks
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  • alexj
    ·2023-03-20
    buy at this rare opportunity
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  • HY1986
    ·2023-03-22
    Ok
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  • SPSerene
    ·2023-03-22
    great
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  • henghm
    ·2023-03-22
    like
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  • henghm
    ·2023-03-22

    Like 

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  • Alconies
    ·2023-03-22
    Ok
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  • Ph2046
    ·2023-03-22
    Ok
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  • Ljoney
    ·2023-03-22
    like
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  • Linsong
    ·2023-03-22
    k
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  • Huat8Huat
    ·2023-03-22
    [Cool]
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  • En Chim Tee
    ·2023-03-22
    Thanks
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  • NANAHO
    ·2023-03-21
    😀
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  • huaer8497
    ·2023-03-21
    💪
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  • jjsteo
    ·2023-03-20
    Up
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  • Gifford007
    ·2023-03-20
    CAn
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