As I was stating on today’s show, “Although you now have the Fed meeting in-the-can, the next thing that is just as important for watching these “markets,” is just how they react going into Friday which is a huge, huge, huge (did I say huge?) options expiry that will be both positioned for as well as against. So machinations are going to move in ways that fit the machine type movements rather than what one thinks when you say ‘human'”
What we witnessed today was precisely both that, as well as finishing the day with what only can be called another “text book” ending to a “market” that is still preforming to the “A bit too technical” music. My apologies to rave dancers everywhere.
For those that doubt my assertions, here’s an excerpt from March 1st when I was plotting out my thoughts and the reasoning why a certain number was to be watched if my conclusions were correct. To wit:
Here was my answer: “Look at at the calendar, and tell me what day it is. You’ll answer your own question.”
What I’m insinuating here is what I’ve always stated one must fully incorporate into their thought processes regarding any market, let alone, these “markets” which is…
Regardless of what is going on in the world that is clouding the mind of the populace and news media. The people that are reliant on getting their paychecks (aka Wall Street) are single minded, laser focused, fully acute to do what ever it takes to push whatever little gas is left in any tank to make the best possible run available to end said month at the best place possible using any and every tool available to accomplish that single objective. For if it can be done – it will be done – because their paychecks depend on it.
Call is “St.Cyr’s month end mantra” if you wish. Because it’s as sure as water will leave a rock wet.“A perspective Update” March 1st 2022
Now, with the above for context, as I said on the show, tomorrow (Friday) is a huge options expiry day and works much like a month end or other such events. i.e., the potential for “big number pegs” is very high (i.e. yes, even higher or lower). And when they get hit, you know, “Wall Street” just hit the cha-ching! button. And you have to be very careful from that moment forward because any and all bullish type of thoughts like “BTFD is back baby!” will suddenly turn into “Wait…WTF is happening here, oh not, not again!” in a heartbeat.
Just as it did the day in the above, aka down ~7% in less than a week.
So now with that all on the table, here’s how today’s “market” ended, again, to wit:
What the above shows is the first circle is precisely where and at what level I pointed to in my original March 1st note above. The second circle, to quote Herman’s Hermits, shows you where it ended today. Funny how that happens, yes?
And yes, officially the expiry is tomorrow (Friday) but the Thursday before is equally as important because of assignment risks.
So, what will tomorrow and beyond bring? Well, you know my answer by now: No one knows. However, with that said, what I would like to point out is that I have not changed my reading or presumptions as to what or why these “markets” are both doing, going and why.
And for those that need a refresher of what that view point is, here’s that chart and I’ve undated to include today’s movement, once again, to wit:
As always, we shall see. But for those that may not fully comprehend the implied caution and why in the above chart, it’s because of this…
I originally started calling for caution and where I thought the “markets” were going not only months ago, but before the markets originally broke through that diagonal line aka “All time highs” and when that “Danger Zone” I created hadn’t a bar with in. And for those doubt that assertion, here it is from January 10th…
Funny how all of the sudden since the Fed stopped pumping boatloads of “free money” into said “markets” it appears pragmatic analysis and technicals seem to be working once again. Funny how that happens, no?
But then again, what do I know. It’s not like I have a battery of buzzers to bang, right?
See you all tomorrow.
© 2022 Mark St.Cyr
Note: This is not trading or investing advice of any sort. This commentary is for “big picture” discussion purposes only. Please read, or re-read the “About This Site” page for any questions or clarifications.