By: Jeff Cooper
Hit and Run Morning Stock Report: March 31, 2023
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Quarter End FOMO, Metal Mark-Up
Thursday was day 13 from the March 13 benchmark low discussed over the last few weeks.
For the past few weeks we’ve said, regardless of whether the market rallies into the end of March on Quarter End considerations, it’s irrelevant given the punch April is set to pack on the downside.
Yesterday we observed that in the previous 100 years, the longest time from the Benchmark to the Breach or Trigger (close below 3808…the March 13 intraday low) was 19 sessions.
That was the picture in 1978.
See chart below:
In April, this pattern that has occurred over the last 10 decades will most likely inform alert traders to an SPX downside target and an approximate date for that low point -- assuming the pattern plays out as expected.
April is interesting because there is a solar eclipse on April 20 right in the heart of the April 19 Date Of Destiny. Then on May 5 we have a significant lunar eclipse which may tie to China/Taiwan relations.
Let’s take a look at 3 charts of concern: SLV, GDXJ, and ENVX.
SLV is the silver ETF.
The first line I drew on the above daily SLV is the blue declining Tops Line.
Notice the confluence with the top rail of the green channel.
The takeaway is SLV is likely to be magnetized to the 23 region quickly.
Clearing 23 opens the door to the purple Ghost Line at 26.50.
The weekly GDXJ below shows a confluence of fan lines at the 42 region.
Just above is the top rail of the green channel at 44.
The takeaway is GDXJ could spike to 42 if it clears the 40 strike.
Above that opens a push to 44.
My overall expectation is that GDXJ & the metals run into early July.
This is 270 degrees from the early October 2022 low.
Notice the 5-wave decline into late September/early October low.
GDXJ shows a wave 1 rally off last fall’s low followed by a wave 2 pullback into early March.
There is a strong likelihood given time/price considerations that GDXJ is in a powerful Wave 3 advance.
1) GDXJ turned its 3 Week Chart up this week. If it continues higher that underpins the Wave 3 argument.
2) As well a Wave 3 advance should knife thru the confluence of fan lines at 42ish. If GDXJ clears the 42-44 resistance, it’s in blue sky and underpins the idea of an extension to 50 which is 360 degrees up from the 26 swing low. Additionally, momentum thru the “confluence” suggests GDXJ can run into early July.
We’ve had a double position in $ENVX for a while and it exploded this week.
A daily ENVX suggests it can be magnetized to 16 in the near term.
Thru 16…buckle up.