13 Mar Monday March 13th Market Notes and More- 3x ETF
Monday, March 13th Notes pre market:
No weekend report this week as I was waiting to see if any Fed action on Sunday. They stepped into guarantee ALL deposits for Silicon Valley and Signature Bank depositors, but both stocks are going to zero under receivership. With that said, one of the issues is not bank mismanagement, it’s the Fed raising rates too high too fast causing a drop in the market value of the 10 year bond/mortgage backed securities these banks put reserves in. When you mark those to market, you end up with a liability on your balance sheet that can turn larger than your assets, even if just on paper. Not a real big problem unless everyone wants their dollars out. The demand for dollars actually shrinks money supply even further which then leads to DEFLATION, not INFLATION…. the Fed is way too far out in front of the curve here in my opinion. As I’ve been saying , leading indicators of m2 money supply and price deflation are suggesting much lower inflation readings going forward, and now the Fed has to back peddle… they caused this bank problem and now they have to fix it.
On the bright side… a few and I mean a FEW market analysts I follow (Jesse Stine, Scott Grannis, former Fed Governor and retired blogger, and a CFTe from a major firm) are slowly turning contrarily bullish on the markets. One of them would like to see 3750 hold on SP 500 and if so, his 60 year chart cycle theory which has been stunningly accurate for a long time is calling for a market cycle low in the March 17-23rd window…. we shall see… perhaps this week is the washout?
Tough tape of late, let’s hang in there. Last Friday I said watch for 3850 on futures. This morning we hit 3940 on a rip but now back to 3867… Bank stocks dragging things down
SPXL- 60.60 pre market
3808 on SP 500 key to watch for 3x ETF SPXL position. Last Friday I noted we may see further drops so if conservative you could take the small loss on SPXL ($64 at the open from $68 average last Friday) or hold and look to double up IF we see $58.80 (60.60 now pre market Monday) and then scale in on dips etc over 24 hour trade window. For aggressive players that remains the playbook for now until updated.
TQQQ- $21.03 pre market
This one we are long from 23.15 average. Same as SPXL advice I gave Friday morning. If conservative take a small loss Friday (21.78 at open) or , hold and look to double down IF we see $19.67 then scale in for 24 hours. That remains the advice for now for those still long.
We sold ERX at open as I said I didn’t like the set up anymore. Its was 59.67 at the open from 62 average, its now $55.15… so far a smart move
Again, I tried to lay out two options depending on your risk profile and with uncertainty I prefer to have only the 2 10% positions here , AND only to double up over 24 hours scale IF we see those prices given. We are either near the classic March Cycle lows (March often marks panic periods and crises in the market) and we are going to reverse within a week, or it gets ugly. For the most part best to keep our two small positions for those still long and again, if you are inclined to start doubling up with 24 hour trade scale rules IF those prices on SPXL and or TQQQ are hit…
Crazy times, give me some rope here… this is not your typical market of late, and in time will calm down. Fed is going to have to reverse gears in my opinion
In the meantime, a few links for you all to read from the few people I follow:
Scott Grannis- Former Fed Governor, brilliant market analyst, straight shooter. He believes fed over shot big time and inflation is going to drop very hard… read his last few posts here:
http://scottgrannis.blogspot.com/2023/ (See menu of posts on left side, read the current one and last one before that on m2 for sure
Jesse Stine. Contrarian and love this guys work, rarely posts free public stuff but did Saturday. Has a knack for sensing MAJOR tops and BOTTOMS… always… his latest (Gets a little crazy on some stuff but focus on market charts etc)
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