Whipsaw Wednesday – (Was Actually 12,010 and Bust!)


Nasdaq 100 Chart HourlyAs we predicted yesterday:  

And no, it’s not TA, it’s just good old Fundamental Analysis and our 5% Rule™, which is not TA, it’s just math.  There simply wasn’t enough value in the Nasdaq 100 nor was there enough likelihood than any of the upcoming components would push us over the very strong resistance line of 12,000, which is the Strong Bounce line on the fall we’ve had from 15,000 (the rest was an overshoot we predicted as such).  

This is why our Short-Term Portfolio is up 1,824% (18x) since 10/28/20 (when we started with $200,000) – it’s a lot easier to make money when you know what is likely to happen next.  By simply not believing in TA Voodoo, we are able to make much more rational short-term and long-term bets along the way.  

The chart we had yesterday was our Nasdaq WEEKLY chart and we’ve been using it since the 2020 crash to tell us where the range would be on the Nasdaq 100.  I know it’s confusing but TA is part of our Fundamental Analysis – simply because so many people follow it, we have to take it into account.  If I were studying college students, I would tell you that they tend to drink more, take more drugs and have more sex on weekends and I could chart it, but that doesn’t mean TA is real – it means Fundamentals can be charted – and that’s not the same thing at all.  

SPX Jan 25 2023

This is our much more volatile S&P 500 Daily Chart and those are the same lines we’ve been using since the 2020 dip as well.  They predicted the rally and, as with the Nasdaq – we didn’t change the value lines just because the S&P went up to 4,800 – we just treated it as oversold and enjoyed the ride while it lasted.  

We never changed the lines because the VALUE never changed and, eventually, value does get reflected in the price – eventually.  Overall, we’re expecting a flat to down year for the S&P 500 and the only reason these lines will change is if the earnings of the S&P 500 change enough to move our range – that hasn’t happened in 3 years. 

This Is Why Water Striders Make Terrible Lifeguards | KQEDIf you know your proper trading range for the index, it’s like know where the banks of a river are.  The river may wind up and down and it may sometimes get flooded (more liquidity) or it may sometimes get dry but knowing where the banks are SUPPOSED to be means we can more accurately predict what will happen to each individual leaf that’s floating in that river.  Though the individual leaves are hard to predict – the overall flow is not, right?

In this case, we’re watching the individual leaves (earnings) and they will give us a sense of which way the current is flowing on the river (our long-term ranges) but, as I noted, there’s going to have to be a lot of evidence before we change our mind about where the banks are.  That has come from some very long-term observations we’ve made.  

Earnings have gotten off to a rough start with the Financials last week and we were at about 50% beats and this week we’ve moved up to 66% but anything under 70% is BAD and some people, like MSFT last night and KMB & T this morning, are beating but guiding lower.  


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Good morning. Here is the link to today’s webinar


Good Morning.

It’s the other way, the Feb contracts NGG23 are at 3.13 and the March contracts NGH23@2.975. Is it dropping just due to traders rolling from Feb to March contracts? What would the impact be if Freeport LNG restarts will that push IS nat gas contracts up and bring down price in European mkts

Last edited 12 days ago by desi

hi Phil — on /NG – The march contract seems down below 3. I am assuming you are still holding your longs (sorry if missed any earlier updates on that)

Marko Kolankov (JPM) is pricing a mild recession at S&P earnings of 200-205, and 180 as the bear case. Either way, seems more downside

Phil / ISRG – weak report, and took a hit today….. think this is good for selling some puts here? Has debt, but more cash (. 6.7B) than debt on books

Thanks,…. I missed the cash draw down…. they did pay off some debt but the not only use of cash… a PE of 26 may be more reasonable

Phil I want to subscribe and cant get anyone to respond to me. If I have a 100K portfolio what do you suggest i subscribe to?

Can you help me on a NFLX position. I have 10 1/2024 NFLX 150/250 BCS that is deeply in the money. Personally I think that we are high in the channel .. Can you give me a better trade. Also, I did something wrong last week and ended up owning SQQQ outright (I had some of the SQQQ1). I would like to sell the shares and do an option trade instead. Any thoughts ..