Today’s report is brief.
With all the tape bombs and headline roulette, I simply want to focus on one thing, the Death Cross.
A Death Cross occurs when the 50 day moving average crosses below the 200 day moving average.
We got one on April 14th, 2025. The SPX pulled back for 4 days then ripped 600 points (typo on chart) or 11% in 9 days.
Prior to this April the last time a Death Cross occurred was in March 2022,
It was followed by an 11% 477 point squeeze from March 1st to March 29th, two weeks.
From late March 2022 the SPX turned down losing 20% in the next 6 months.
Is it foolproof? Nothing is in the markets. We have to watch the behavior once a setup such as this occurs.
In addition to a supposed lessening of chip restrictions near the markets close, there is trade deal to be announced with the U.K. today.
The news breaks with the cycles: although it was touch and go our Wednesday pivot looks like it was a low in synch with a turn down in the 3 Day Chart.
However, with yesterday’s late “chip rally” the SPY traded above Tuesday’s high,
This morning the SPY is trading above Wednesday’s high.
In sum the 3 Day Chart turned down for a Minus One and now we have two consecutive higher daily highs for Plus Two producing a Minus One/Plus Two sell setup on the dailies.
It is occurring on an attempt to recapture the 5650-5660 Maginot Line, last summer’s highs.
It is a SETUP. Let’s see what the market does with it.