SPY - A Dip Is Coming. Maybe Buy It?The question at the top of everyone's minds right now is: have the markets topped?
It's the kind of question that allows for a great deal of manipulation as sentiment, emotions, and the P&L column are manipulated violently.
Since the markets were wildly bullish last quarter, inside of an overall market that is not bullish, and economic fundamentals that are pretty bad, your guard should certainly be up when you see a new quarter begin and price continue to run rampant.
I discuss the parameters of a new quarter in the below post:
SPX/ES - An Analysis Of The 'JPM Collar
And elaborate my feelings on the Nasdaq here:
Nasdaq - The Great Bear Trap
Caveat to the above is I now expect the Nas to only do, say, 14,400 and ultimately target the 16,000 figure.
You're in an overall market where the US Petrodollar is set to rally, and rally hard:
DXY - The US Petrdollar And The "Prigozhin Coup" In Russia
Even though the dollar might only do 108.
And our good friend the VIX is too low to be sustainable for any kind of bull run, because they love "selling volatility and going away," so things need to be reset.
VIX - The 72-Handle Prelude
Geopolitically, there are a lot of problems. Specifically with China.
Since Secretary of Treasury Yellen visited Beijing to meet with Xi Jinping and other government officials, there has suddenly been a huge posturing of "Taiwan war" rhetoric in the whole international media propaganda apparatus.
China is in no condition to try to invade Taiwan after the damage the pandemic has caused for the last three years, however.
In my view, what's really going on is the Chinese Communist Party is about to either be forcibly overthrown by "outside forces" (NATO, Washington, the "International Rules Based Order") via Taiwan.
Or Xi is about to dump the CCP to defend the motherland, since he and his faction are major Chinese nationalists.
Either way, you have to be very careful if you want to go long on dips. Don't full port or anything stupid, and if you want to go bigly long, do yourself a favour and hedge long on something with volatility.
Because whatever happens will happen in Beijing time, which happens to be 12 hours ahead of New York time.
Meaning whatever happens will be gap down time.
And if Xi dumps the Party and weaponizes the 24-year long persecution of Falun Gong by former CCP Chairman Jiang Zemin and its Shanghai (Babylon) toadling faction, the entire world is going to be implicated in the inquest.
Because everyone has been going over to the Mainland to dirty themselves with Jiang and the Spectre of Communism in order to get the financial and social benefits they desire.
But as long as things stay on course, here's the call.
When it comes to SPY, it's hard to argue what is up isn't going to keep going up.
If you ask me, the first target has to be the $461 March of 2022 high.
But we've been up a lot for a long time, and SPY set its thus-far July low at $437 on only the third trading day of the month, which was a shortened week because of Canada Day and Independence Day to begin with.
You can see that something is amiss by looking at the SPX Futures contract against the DXY, which lost 400 pips in roughly 10 days, marking a significant and strange divergence.
Another significant tell is in the Dow, which is the weakest of the indexes right now and a leader, where the DIA ETF made a new high (2 cents, hard to see) but the underlying futures contract did not.
This may indicate that the alleged bullish momentum from last week is fraudulent, at least in the short term. Possibly the long term.
Friday's market action was really bullish on open and then really bearish on close, which likely means we're due for a reversal.
We have an entire eight trading days until the next FOMC rate announcement.
After July, there's no meeting until September.
So what I think we're about to see is to have a proper July low of the month get set.
And before the month ends we'll see a bounce, and our bounce will lead to the $463 target being achieved during the first week of August.
And so if we have a middling/strugglebus Monday, it's worth considering reducing your long exposure, if you have long exposure.
I think the $433 figure is the target because everyone is a Mason in reality and they just love 33 so much. It also doesn't break the June pivot, which aligns with the August of '22 pivot that was already taken out.
More importantly, if $463 is achieved, you have to be exceedingly cautious.
There's a certain degree of "financial shocks" that are arranged for Q4 and Q1, 2, and maybe even 3 of 2024 that you will find exceptionally difficult to endure.
So make sure you make up for any regrets you have with your friends and family, as soon as possible.
Make sure you stand on the right side of history when it comes to humanity's future and the CCP and its Marxist-Leninist junk.
Money, fame, power, and sex aren't worth selling your soul for.
