I know that the current zeitgeist is that the Fed is ready to cave, and we are on the cusp of the next bull market. Traders are thinking that we are in a Goldilocks zone of a soft landing. I can’t help but question this assumption. The Nasdaq 100 has been on fire, but I think bulls should be careful here. We have a quick move up into a composite cycle high and a couple of targets, one from wave (c) to (a) relationships at 12830, and others based on a confluence of retrace values between 13010 and 13105. Yes, the alternative way to interpret this cycle inflection as a low that will support a net upward move into late March.
Something that I have had an eye on is the VIX via this ETN, VXX. Yes, it as continued lower past the last cycle inflection from the 17th of last month but is now on the cusp of the next exhaustion signal when on the 1/4 cycle. Looks like over exuberance to me but we will see.
Another chart I have been keeping an eye on is the % of S&P components under the 20-day moving average. Here we see a string of higher lows. Again, this looks like the equity markets are out over their skis and ready for a tumble to me.
OK, ok, back to the present. Short-term SPX appears to be pushing for 4198 or 4203. I’m penciling this in as a low degree third.