Posted by Martin April 15, 2023
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Soft landing or recession?

Here we go again. Retail investors and even some bigger players are again afraid of inflation, recession, and ghosts. Media are digging out bears and recycling their stories and narratives, such as Mike Wilson from Morgan Stanley, who has been notoriously predicting a 50% (now only 20%) crash since 2009. Yes, he was right in 2022 when the market shed almost 30%, but he still kept predicting an additional 50% crash.

And people listen to this crap. Sure, we may go lower again, but I do not see any reason for it. Here is my logic: The FED was raising the interest rates aggressively. Everyone was seeing it as a dangerous game that would put the US economy under such strain that it would break and crash. But it didn’t happen. Even after the aggressive hikes, the economy remained extremely strong. Yes, it is slowing, but it is not collapsing. The labor market also remains extremely strong. And on top of that, inflation is slowing down at a faster pace than anyone expected. So the FED paused hiking the rates.

If the economy hasn’t crashed during a year of aggressive interest rate hikes, why would it crash now when inflation is slowing, and the FED is probably done hiking the rates?
And people listen to doom and gloom predictors like Roubini, Grantham, or Wilson and keep buying puts. And they are losing money. They are selling their stocks and staying aside because people like Wilson are telling them that the markets will crash more. And they are missing the opportunity. Retail investors are still sitting on huge losses despite the recent rally, just because they stayed out of the market.

Analysts, who are usually wrong and more pessimistic than they need to be, predict earnings to drop by 7% this year. After 13 years of gains, a 7% drop in earnings is not catastrophic. In 2015 earnings dropped by 18%, and yet the US avoided recession. In 2011, earnings dropped by 2%, and the economy avoided recession, too, despite bears like Grantham saying that recession was imminent. Since 2021, earnings have dropped by 10.6% already, yet we are not in a recession. Well, technically, we are, but there is no catastrophic crash; the market already corrected almost 30% last year, if you haven’t noticed.

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Posted by Martin April 12, 2023
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Technical view: Medical Properties Trust, Inc. (MPW)

MPW is in stage #4. The company recently started fighting back against one of the biggest short sellers. That caused the stock to bounce two weeks ago. But the company still faces strong headwinds as the interest rates rise fast and hospital owners are weak. It is ironic that MPW is one of the largest hospital REITs owning properties around the world but struggles with them.

The weekly chart above shows a rapid selloff after recovery from October lows. There is no sign of relief, at least not yet. The recent bounce may be another bounce in the end. The company now expects another hit to their earnings so this could be a problem and the stock may drop more. However, this could be a good opportunity, similar to 2008-2009 when the stock dropped hard as well:

Definitely, investing in MPW now you need strong guts to do it. If you are worried about the financial situation of MPW, then wait until this clears up.
Recently, there has been a lot of talk about the dividends and that the company will cut them because the current yield is not sustainable. But looking at the financials of the company, there still is no reason for a dividend cut:

As the free cash flow indicates, the company is bringing in approximately $180 bn in free cash and pays out approximately $162 bn in dividends.

MPW pays nice dividends and keeps raising it annually at a steady pace of 3% (5-year average). There appears to be only one cut so far in 2008 and that was obvious:

Earnings were steady, not overly growing but positive except in 4Q 2022. We may see another decline in 1Q 2023:

But this decline may already be included in the recent price as the stock trades significantly below its fair value.

The company’s debt is a concern. But recently they started improving their balance sheet and reducing their debt burden. Hopefully, this trend will continue:

The debt that was due in 2023-2024 was covered by cash and sales of their Australian assets. This can boost the cash flow even in the case of one of their tenants (Prospect) should pay $0 in rent (which is unlikely).

The short selling of this company is so intense (currently sits at 20% short interest) that there may be a short squeeze brewing under the hood. At some point, the short sellers will start taking their profits and that may spark more covering and rapid price action.

Investing in MPW can be risky but it seems the stock hit bottom. If so, the recovery can be rewarding.

The stock is now AGGRESSIVE BUY

This post was published in our newsletter to our subscribers on Saturday, April 9th, 2023. If you want to learn more about our stock technical analysis subscribe to our weekly newsletter.

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Posted by Martin April 08, 2023
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Technical view: Main Street Capital Corporation (MAIN)

MAIN is morphing back to stage #2. The stock seems to be performing well and offers a good buying opportunity. It pays dividends monthly. However, fundamentally, the stock seems to be providing grim data which may have an impact on the stock growth. MAIN was offering great dividends and small growth matching the index (7.16% vs. 7.23% of SPY). This may not be the case unless financial data improve.

The monthly chart shows the stock moving higher slowly over time since its inception. It had a huge setback in 2020 when the stock crashed but the company kept paying dividends. On top, the company paid a few special dividends further boosting investors’ income.

The chart above seems to be indicating a dividend cut in 2021 but other sources do not show it:

MAIN is unfortunately trading above its NAV making the stock relatively expensive:

The company has a somewhat erratic revenue stream but overall, its revenue is growing over time. It however grows 6.75% annually. Five-year revenue growth is 9.47%.

The free cash flow of MAIN is pathetic and the company seems to be burning cash.

Another concern is growing debt and little cash to cover it:

The company may cover the lack of cash by issuing more shares and issuing new debt. In the raising interest rate environment, this may backfire and break the company’s financials. Thus, investing in this company requires caution and not investing all of your money.

The company may be a bit expensive based on the NAV valuation (currently, it trades at a premium). Still, I believe this is compensated for by dividends well enough to be investing.
Fundamentally, the stock offers good value at the current price. It appears safe to buy here.

Price vs FCFE/AFFO shows, at least for now, that the company makes enough money to cover the dividend:

The stock is now AGGRESSIVE BUY

This post was published in our newsletter to our subscribers on Saturday, April 2nd, 2023. If you want to learn more about our stock technical analysis subscribe to our weekly newsletter.

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Posted by Martin April 01, 2023
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March 2023 $100 Challenge account review

We didn’t trade much during this turmoil of the banking crisis, recession fear, and end-of-the-world imminency. Rather we preserved the cash. Remember, our account is still small and we cannot take risky trades (we did two times and it backfired, but we have time on our side). Also during the recent sharp market selloff (chart below), our buying power went negative (!!) and it was wise to stay in cash as much as possible and wait for this stupidity to end. And at some point, it will end. Investors will realize how dumb they were and start rushing back in propping the market back up.

Besides that, our Challenge account continues grinding higher, and as the market stabilizes, I expect it to improve more.

Accumulation phase

The account is still underperforming our goal but started growing again. We are investing in stocks of our interest and building equity positions. We also started selling Iron Condors and spreads. We got rid of QYLD stock, and we will no longer invest in this ETF as its performance is terrible, and its dividend income doesn’t look as enticing as it looks on paper. We want a stable company that provides some price appreciation and dividend growth. So we replaced QYLD with MAIN.

March 2023 Challenge account review

MONTH	GOAL $$	ACTUAL $$
January 2022:	$924.00	$594.29
February 2022:	$1,027.00	$283.87
March 2022:	$1,130.00	$301.74
April 2022:	$1,233.00	$350.56
May 2022:	$1,336.00	$428.82
June 2022:	$1,439.00	$459.70
July 2022:	$1,542.00	$641.27
August 2022:	$1,645.00	$653.32
September 2022:	$1,748.00	$617.92
October 2022:	$1,851.00	$829.46
November 2022:	$1,954.00	$1,003.01
December 2022:	$2,057.00	$1,152.65
January 2023:	$2,160.00	$1,221.22
February 2023:	$2,263.00	$1,286.04
March 2023:	$2,366.00	$1,392.45

From the chart above, the red dot (line) indicates the current account value, compared to the blue line (plan). Our account is underperforming our goal. But I expect this to improve with the market. We will keep buying assets and monetize them once we accumulate enough shares.

March 2023 Overall Challenge account review

The chart below indicates our account value compared to the overall goal and plans to grow the $100 investment into a $75,000 portfolio. As of today, we are still at the beginning of our journey.

YEAR	CONTRIBUTIONS $$	GOAL $$	ACTUAL $$
Year 0:	$100.00	$100.00	$100.00
Year 1:	$1,300.00	$1,336.00	$459.70
Year 2:	$2,500.00	$3,016.96	$1,392.45
Year 3:	$3,700.00	$5,303.07
Year 4:	$4,900.00	$8,412.17
Year 5:	$6,100.00	$12,640.55
Year 6:	$7,300.00	$18,391.15
Year 7:	$8,500.00	$26,211.96
Year 8:	$9,700.00	$36,848.27
Year 9:	$10,900.00	$51,313.64
Year 10:	$12,100.00	$70,986.56

March 2023 Challenge account Income

Total Invested in Stocks	$1,266.64
Stocks Unrealized Profit	-$87.42
Stocks Realized Profit	-$57.18
Strangles Income	-$1,316.00
Spreads Income	$49.00
Dividends Income	$55.56
Deposits Total (lifetime)	$2,300.00
Cash	$214.97
Net-Liq	$1,392.19

If you want to see what investments we take and what trades and strategies we will use to grow this small account, join our program today and grow your money. We engage in safe investments, select strategies to maximize winning trades and grow our portfolio. And you can do it too, today! We do not provide quick rich promises, gambling, or reckless strategies. We want our portfolio to grow steadily and preserve our capital while maximizing returns.

As a member, you will have access to the following features:

Weekly newsletter which provides market news and outlook, stocks analysis, and options trading course
Account statements
Account trading journal
Archived emails

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Posted by Martin April 01, 2023
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March 2023 SPX put credit spreads trading review

February and March SPX trading improved well. We were actively trading our SPX strategy which delivered a $3,971.00 gain. Many of our trades got slammed in 2022 and instead of closing these trades for pretty large losses, I decided to use a rather unorthodox strategy. Many people will probably disagree with me and despise it outright, but the strategy works well for me. I open a “box” trade that delivers a lot of credit and use that credit to roll trades in trouble. And I keep rolling until the trade is safe and expires. All I do is maintain a positive balance between credit received from the “boxes” and spent on rolls.

In March 2023, our trading delivered a gain of $3,971.00. Our account was up by 8.38% while SPX gained 4.00%.

Our SPX account is up +1,327.22% since the beginning of this program, and we have $35,880 in unrealized gains.

Initial SPX trade set ups

I dedicated a $3,600 initial amount that will be used to trade SPX PCS strategy per week. Today, the account is up at $51,379.95. However, due to the recent bear market, many trades are still open, and the funds are tied to those open trades. The trades need to expire or be closed for a profit to release the funds.

Our SPX strategy is designed as directional options trading. We are selling credit put spreads to collect premiums, and hopefully, these spreads expire worthlessly, or we repurchase them for a small debit.

We use a set of indicators, trend prediction (primarily based on moving averages, volume profiles, and trend forecasting), and market sentiment that generates bullish signals. The trading is based on a “trend-following strategy.” We open the trade if we have a bullish signal and a bullish trend. If we do not have a signal, we stay away. We also trade credit call spreads when we have bearish signals. In a choppy market, we stay away from or trade very short expirations (usually 1 or 2 days or up to 7 days), but the trading is muted as we need a trending market.

Unfortunately, today, the market is headline sensitive and can gap in either direction to fail and reverse. It is not easy to trade and not get whipsawed. That’s why we are managing our older trades and not opening new ones until we see a clear market direction.

Here you can see all our 2023 trades:

Click on the picture above to see the entire list.

Last month trading

Overall, the strategy resulted in a +1,327.22% gain last month.

Initial account value (since inception: 12/07/2021):	$3,600.00
Last month beginning value:	$47,408.95
Last month ending value:	$51,379.95 (+8.38%; total: +1,327.22%)
The highest capital requirements to trade this strategy:	$19,995
Current capital at risk:	-$17,880
Unrealized Gain:	$35,880 (-200.67%)
Realized Gain:	$4,109 (22.98%)
Total Gain:	$39,989 (-223.65%)
Win Ratio:	49%
Average Winner:	$739
Average Loser:	$644

As you can see, our account currently shows a realized gain of $4,109, and we have an additional $39,989 unrealized gains.

SPX PCS account value

SPX PCS account vs SPX index net liq

SPX PCS account vs SPX index

If you want to receive trade alerts whenever we open a new SPX put credit spread or a hedge trade, you can subscribe to our service:

SUBSCRIBE HERE

Note that if you wish to subscribe to multiple levels, you can only subscribe to one level and send us an email that you want to be added to other levels.

Also, if you like this report, hit the like button so I know there is enough audience wanting to see this type of report. If you have any questions or want to see anything else about my SPX trading, do not hesitate to contact me or comment in the comments section. Thank you!

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Posted by Martin April 01, 2023
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March 2023 Investing and Trading Report

March is over. And our Investing and Trading are beginning to see improvement again after the bear market of 2022. People still do not believe that the bear is over and keep creeping all over social media how much we are going to crash soon, TV shows pull out from their asses doomers like Roubini predicting further doom. Though trading may be choppy, we are on the path to recovery. No bear market lasts forever, despite how much you wish for it because you spent your entire inheritance on buying puts.

Tasty Trade finally fixed their BP (buying power) issue, so my account once again shows the correct buying power and I no longer have to go to the tech support for help rolling trades and I can move forward trading full speed.

Last month was still a bit hectic. I was busy at work so I couldn’t trade and report much, but I spent the month adjusting my trades – mostly rolling my SPX spreads that got in trouble during 2022. Thus, March will be negative. But my trades will be in better shape. And our account is also getting in better shape:

Our options trading delivered -$1,462.00 gain last month (-2.05%). Our net-liq value decreased by -1.77% to $71,182.72 value. Our overall account is up 14.34% YTD and -31.98% from when the bear market started in January 2022.

Here is our investing and trading report:

Account Value:	$71,182.72	-$1,282.33	-1.80%
Options trading results
Options Premiums Received:	-$1,462.00
01 January 2023 Options:	+$1,466.00	+1.97%
02 February 2023 Options:	$2,754.00	+10.34%
03 March 2023 Options:	-$1,462.00	-2.05%
Options Premiums YTD:	+$2,758.00	+3.87%
Dividend income results
Dividends Received:	+$482.14
01 January 2023 Dividends:	+$407.13
02 February 2023 Dividends:	+$731.21
03 March 2023 Dividends:	+$482.14
Dividends YTD:	+$1,620.48
Portfolio Equity
Portfolio Equity:	$199,268.73	+$897.15	+0.45%
Portfolio metrics
Portfolio Yield:	5.82%
Portfolio Dividend Growth:	22.13%
Ann. Div Income & YOC in 10 yrs:	$390,197.91	183.55%
Ann. Div Income & YOC in 20 yrs:	$5,816,110,304.43	2,735,893.94%
Ann. Div Income & YOC in 25 yrs:	$100,401,216,997,254.00	47,228,657,508.53%
Ann. Div Income & YOC in 30 yrs:	$140,811,496,634,662,000,000.00	66,237,622,876,666,900.00%
Portfolio Alpha:	-2.02%
Sharpe Ratio:	7.00	EXCELLENT
Portfolio Weighted Beta:	0.54
CAGR:	236.33%
AROC:	4.07%
TROC:	4.92%
Our 2023 Goal
2023 Dividend Goal:	$8,000.00	20.26%	In Progress
2023 Options Income Goal:	$70,000	3.94%	In Progress
2023 Portfolio Value Goal:	$96,532.51	73.74%	In Progress
6-year Portfolio Value Goal:	$175,000.00	40.68%	In Progress
10-year Portfolio Value Goal:	$1,000,000.00	7.12%	In Progress

Dividend Investing and Trading Report

In March 2023 we have received $482.14 in dividends bringing our dividend income at $1,620.48.

Last month, we bought these dividend growth stocks:

– 100 shares of JXN @ $43.90

We now own 100 shares and we started selling covered calls. Options for this stock are not much traded so we are selling longer-dated calls.

– We sold 200 shares of QYLD. I no longer think it is a viable investment. The price is going down and dividends are tied to the price, so the dividends were going lower too.
– We also sold 100 shares of Ford (F). It was a mistake from day one. But I got sucked in the EV mania and thought Frod would be the winner. Bullshit.

After selling these shares, we bought:

107 shares of MAIN @ $39.55

This purchase brought our holdings to 207 shares. We started selling an additional contract of covered calls.

– 100 shares of MPW @ $7.91

We now own 200 shares and we added an additional covered calls contract.

Here is a chart of our account equity showing our accumulation goal and the value of all stocks in our account. It shows a nice upward-sloping chart as our equities grow. This is a result of our options trading and using premiums to buy dividend stocks:

And here you can see the dividend income those equities pay us every year:

Growth stocks Investing and Trading Report

In March 2023, we purchased no growth stocks.

Options Investing and Trading Report

In March 2023, our options trading delivered a loss of -$1,462.00. This was a result of adjusting our trades during volatile days when we needed to maintain buying power and also roll the trades. So although technically, it is a realized loss, I consider these losses to be paper losses because I opened new offsetting trades “to keep the music playing.”

We were actively trading our SPX strategy that delivered $3,971.00 gain. Our SPX trading is improving rapidly too. Many of our trades got slammed in 2022 and instead of closing these trades for pretty large losses, I decided to use a rather unorthodox strategy. Many people will probably disagree with me and despise it outright, but the strategy works well for me. I open a “box” trade that delivers a lot of credit and use that credit to roll trades in trouble. And I keep rolling until the trade is safe and expires. All I do is maintain a positive balance between credit received from the “boxes” and spent on rolls.

Expected Future Dividend Income

We received $482.14 in dividends last month. Our portfolio currently yields 5.82% at $71,182.72 market value.

Our projected annual dividend income in 10 years is $390,197.91, but that projection is if we do absolutely nothing and let our positions grow without adding new positions or reinvesting the dividends.

We are also set to receive a $7,440.64 annual dividend income ($620.05 monthly income). We are 1.91% of our 10 year goal of $390,197.91 dividend income.

The chart above shows how our future dividend income is based on the future yield on cost and what dividend income we may expect. The expected dividend growth depends on what stocks we add to our portfolio and the stocks’ 3 years’ average dividend growth rate. It is interesting to see what passive income we may enjoy 10, 20, 25, or 30 years from now.

Market value of our holdings

Our non-adjusted stock holdings market value increased from $198,371.59 to $199,268.73 last month.

In 2023 we planned on accumulating dividend stocks, monetizing these positions, HFEA strategy, and SPX trading. We plan to raise more of our holdings to 100 shares to sell covered calls. We continued rebalancing our options trades that released buying power significantly. That allowed us to start repurchasing shares of our interest.

We aim to accumulate 100 shares of dividend growth stocks we like and then start selling covered calls or strangles around those positions. We also planned on reinvesting all dividends back into those holdings.

Investing and trading ROI

Our options trading delivered a -2.05% monthly ROI in March 2023, totaling a 3.87% ROI YTD. We plan to exceed our 45% annual revenue goal in selling options against dividend stocks.

Our entire account is still down -31.98% from when the bear market started. However, in 2023 our account is up 14.34% YTD.

Our trading averaged $919.33 per month this year. If this trend continues, we will make $11,032.00 in trading options in 2023. As of today, we have made $2,758.00 in trading options. This is below our projected goal. Based on the goal, we should average $5,834 options income per month. But I hope, as the year progresses, we can increase options income to our goal.

Old SPX trades repair

We traded our SPX put credit spread strategy, which you will be able to review in in our next post. The SPX strategy provided $3,971.00 income (8.38%) while SPX delivered +4.00%.

Investing and trading report in charts

Account Net-Liq

The drawdown of our account is highly discouraging, but it started improving. I am not selling any stock positions, and I will be buying back those I sold to release our Buying Power. On top of that, I will be buying more dividend-paying shares as much as possible.

Account Stocks holding

Last month, S&P 500 grew 42.06% since we opened our portfolio while our portfolio grew 14.57%. On YTD basis, the S&P 500 grew 9.33% and our portfolio 5.09%. We are underperforming the market.

The numbers above apply to our stock holdings adjusted by options premiums.

Stock holdings Growth YTD

Our stock holdings are underperforming the market. Hopefully, this trend will stay, and we will constantly do better than S&P 500.

Our 10-year goal is to grow this account to $1,000,000.00 value in ten years. We are in year two, and we accomplished 7.12% of that goal.

Our 6-year goal is to reach $175,000 account value to be eligible for portfolio margin (PM), and today we accomplished 40.68% of that goal.

Our 2023 year goal is to grow this account to a $96,532.51, and today we accomplished 73.74% of this goal.

Investing and Trading Report – Options Monthly Income

Investing and Trading Report – Options Annual Income

Our dividend goal and future dividends

We planned to make $8,000.00 in dividend income in 2023. As of today, we received $1,620.48. We also accumulated enough shares to start making $7,440.64 a year. Our monthly projected dividend income is $620.05, and our current monthly dividend income is $135.04.

I have a favor to ask. If you like this report, please, hit the like button, so I know that there is enough audience that like this content. Also, if there is something you want to know or you want me to change this report to a different format, let me know in the comments section.

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Posted by Martin March 29, 2023
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Technical view: Amazon (AMZN)

AMZN is in stage #1. There is still a buy signal for this stock, but the trend stalled. At least we are not going down anymore, again, at least not now. But the weekly chart just flashed a strong buy signal. Let’s see if it holds. The trend may soon morph into stage #2.

AMZN’s revenue growth is impressive, and it is growing at an 8.58% annual growth rate. Its 10-year growth is 21.51%:

Amazon’s cash flow was a bit wacky and in 2021 it was even negative. But the reason for it was that the company was heavily investing in its infrastructure – building new distribution centers, new delivery ways, etc. These heavy investments in transportation and distribution centers will pay off in the future.

These expenditures had an impact on the company’s EPS which was negative last few quarters. But again, I think this is a temporary setback caused by investments.

Shares outstanding are quite high indicating dilution to shareholders. The company has been diluting constantly since 1999 but the rate of increase is fairly small. The 10-years dilution ratio is 1.16% only.

The company has enough cash on hand to eliminate all its debt:

The company is still overvalued in the short term, but it is trading below its 2025 fair value. Unless it changes, it is trading at a level where it is worth buying.

The stock is now AGGRESSIVE BUY

This post was published in our newsletter to our subscribers on Saturday, March 25th, 2023. If you want to learn more about our stock technical analysis subscribe to our weekly newsletter.

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Posted by Martin March 23, 2023
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03.22.2023 – WEDNESDAY MARKET OUTLOOK

So the FED did exactly what everyone expected, yet the market sold off hard (over 1.5%) at the end of the session. The whole day was flat until Powell spoke and revealed to be less hawkish. But then he mentioned that the fight to mute inflation is not over (wishful thinking as banks will force him to abandon this reckless policy) and the market sold off. In my opinion, it was just an overreaction to something everyone knew anyway and in that case, this may be just a dip that may recover tomorrow. But we need to wait and see whether this bearishness is going to continue or not.

Despite the selloff, the market is still upward-sloping and all we did was just erasing yesterday’s gains. Normally, with only a 0.25% rate hike the markets would rally to the moon, so there is something fishy here.
Daily Ichimoku charts starting to improve and the price got above the red line yesterday, but today’s sell-off returned the chart back to a full-blown bearish look:

However, the weekly chart improved a nod. We now have the green line above the price so the chart continues improving but given that it is actually moving sideways, I do not expect much. We are range bound and it seems it will stay like that for some time.

The forecast for tomorrow is to recover today’s losses, but if the bearishness continues expect more selling to come. Let’s see if this plays out.

This is a delayed outlook. If you want to learn more about our SPX weekly analysis, subscribe to our weekly newsletter.

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Posted by Martin March 22, 2023
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Technical view: Ares Capital Corporation (ARCC)

ARCC is in stage #4. The stock appears to be consolidating and it could eventually bounce but the trend is weak, and we still have a strong sell signal. The weekly chart is trendless with no signal, but it indicates that there may be no more selling, at least for now.

The company recently saw a significant reduction in revenue, so the price decline may have been justified. However, in the Q4 of 2022 revenue started to increase again:

Free cash flow is a bit erratic and not the way I would like to see:

Another significant concern is rising debt and not enough cash on hand to pay it off. This can eventually backfire and the company will have to address it in some way:

The dividend growth is also irregular but growing. If this metric worsen, I may take this position off of my portfolio:

It is typical for a REIT to issue new shares to provide financing to obtain new properties, but here we see rising shares outstanding and the debt hand in hand. Honestly, I do not like it.

Fundamentally, the stock is undervalued and trading way below its fair value and normal P/E, providing a margin of safety making this investment relatively safe. However, in the next 2 years, Wall Street expects revenue declining by 5% in 2024 and 14% in 2025. This may impact the stock price. It may be moving sideways or keep declining.

The AFFO data are scarce for this company but it appears that it has enough cash flow to make the stock price undervalued.

The stock is not a grower so do not expect capital appreciation, rather this stock should be bought for dividend income only. Thus, the strategy should be set to buy when the stock is selling low and hold during high prices. Currently, any price below $17.50 can be considered a good entry price.

The stock is now MODERATE BUY

This post was published in our newsletter to our subscribers on Saturday, March 19th, 2023. If you want to learn more about our stock technical analysis subscribe to our weekly newsletter.

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Posted by Martin March 21, 2023
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03.20.2023 – MONDAY MARKET OUTLOOK

The banking crisis seems to be calming down. FED may potentially pause the interest hikes so as not to cause further damage because for years the FED was telling everybody that the interest rates will stay low for a long time… so buying long-term Treasuries didn’t look like a risky idea. Everybody did it, not just banks. Imagine pension funds, they may be next. And then after 10 years of ultra-low to negative interest yields the FED rockets the rate to 5% within a few months. Of course, no one can sustain such a rapid hike if you suddenly need cash and the 10-year Treasuries which looked like a safe haven are suddenly worthless!
And the market may be now looking forward to some stability. After some bearish start, the index finished green.

Daily Ichimoku charts starting to improve and show some recovery. But still, long time to go to fully recover from the damage. And if the FED screws it up again tomorrow, we may not recover at all and instead head lower.

The weekly Ichimoku chart holds well so far and it is even attempting to break into the cloud. The cloud is strong resistance and we still may bounce down from it. It would be a good signal for the markets if we break into it and above.

The forecasting chart shows a potential down day tomorrow and if the FED doesn’t cooperate it may very well happen. If however, the FED shows a bit dovish stance, the market may continue higher. Note that forecasting is a purely mathematical model based on past data. It may capture the momentum of the trend but may not work well if influenced by sudden news or black swans that disrupt it. There fore the chart below needs to be confirmed. Unfortunately, we do not have that confirmation on any other chart, though there is an improvement that may help push the markets up and invalidate the recent forecasting series.

This is a delayed outlook. If you want to learn more about our SPX weekly analysis, subscribe to our weekly newsletter.

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