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Friday, March 29, 2024

Brace for Impact

Brace for Impact: ETF Daily Outlook (SPY, DIA, ETFs)

Courtesy of John Nyaradi

The GBU-43/B Massive Ordnance Air Blast bomb prototype is shown moments before impact March 11, 2003. The detonation created a mushroom cloud that could be seen 20 miles away. (Courtesy photo)

Weekly stock market and ETF Update from Wall Street Sector Selector

Instratrader Indicators:

  • Red Flag: We Expect Lower Prices Ahead 
  • Daily Technical Sentiment Indicators: Pessimistic (bullish short term) 
  • Short Term Market Condition:  Oversold (short term bullish) 
  • Short Term Trend: Down 
  • Medium Term Trend: Down 
  • Long Term Trend: Down

Commentary: 

I’m traveling in China for about 10 days and so won’t be able to do the daily ETF update but will update on days when significant market action occurs. 

We’ve been saying for sometime that we were on the cusp of a serious downtrend and it seems that yesterday could very well have been the start. 

Global markets were routed as the reality of slowing economic growth finally hit home and fundamentals began to catch up with sentiment as they invariably do.  Economist Robert Shiller says odds of a double dip recession stand at even now while the Fed basically acknowledged that things aren’t going as well as they had anticipated even a few weeks ago and so they remain in the easing mode. 

As we discussed recently, the options they have to “fix” things are now quite limited.  Growth in China is slowing (I hope to be able to issue some first hand reports) and U.S. GDP appears to be in a downward spiral of revisions to the 1% level, which is truly scary. 

Cisco had a huge miss on their earnings announcement yesterday and with the Fed meeting out of the way, the rest of the week brings more weekly jobs news, and retail sales and consumer sentiment on Friday. 

Technically, the S&P failed to reach new highs and fell back below its 200 Day Moving Average and now rests on support at the 40 Day Moving Average.  A sustained break below here could lead to quickly cascading prices. 

We switched to the “Red Flag,” mode, expecting lower prices, and we believe the wisest course is to brace for impact. 

Disclosure: No positions mentioned 

John Nyaradi is Publisher of Wall Street Sector Selector, a professional ETF Trading System designed to capture profits in both up and down markets.  It is specifically designed for active traders. For a risk-free 30 day trial of John’s Wall St. Sector Selector, click here.

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