Special Bulletin: March 21, 2023

Can We Just Call it Orange?

Too bad traffic lights don’t have orange in their sequence. The natural outcome of blending red and yellow is, of course, orange. And that is theoretically where our C.M.O. finds itself as of today’s close. Currently red but so close to going yellow!

If I hear another person say that tomorrow’s Fed rate decision is probably the biggest of our lifetimes, I’ll get nauseous! But wait, this time they might actually be right (Did I just say that!?!?!).

No doubt this past week’s amazing theater with the banks et all has put a wrench into the fed’s playbook. But that is what the Fed is here for… to sort out our messes, right? (Not really.)

Tomorrow, if they hike too much, then kerplop! The market freaks. If they don’t hike at all, then “Oh my! Things must really be bad,” and the market freaks and goes kerplop again.

But then there is the “just right hike” (think Goldilocks and the Three Bears). Unfortunately, this is no fairy tale- this is real life- and tomorrow is “show time.” (The image of “bears” seems to fit really well at this moment.)

Our Current Market Outlook remains “Market in a Correction” with a red light. Our “Core Four” (see top of page) sports 2 yellow and 2 red lights with a declining but still slightly elevated VIX.

THIS REMAINS A CRITICAL JUNCTURE. The Fed’s rate decision tomorrow and commentary on its future outlook will be a “market-breaker” or “market-maker.” The current attempt by the S&P 500 to get up and over its 50-day moving average is at a profound moment. All eyes are on tomorrow’s decision.

The stock market’s technical set-up confirms the markets ability to break hard either way. We are on the verge of a big jump up and over the 50-day mav on massive volume (which would immediately change our signal to yellow, if not green) or the opposite pattern, what we call a “Nathan Short” pattern, which would be fulfilled with a sharp break down on massive selling volume. We are at the proverbial crossroads.

Remember “orange.”

“Blessed is the man who trusts in the Lord and whose trust is the Lord. “For he will be like a tree planted by the water, that extends its roots by a stream and will not fear when the heat comes; but its leaves will be green, and it will not be anxious in a year of drought nor cease to yield fruit.” Jeremiah 17:7-8 NASB 1995

Game plan: Breath deep, stay calm and pray for wisdom. Closely monitor the S&P 500’s 50-day and 200-day mav’s (sandwiched between them) as a risk-on or risk-off exit strategy. The US Treasury 10-year note yield remains a major tell.

Note: You can learn more about The Triumphant Core Four risk management system by clicking here.

Have a Triumphant day! ®