@alma271828 “I expect a short-term relief into the first half of April and another leg down, then a quick rebound and top into summer. This is how it looks to me right now.” It’s still looking the same? Thanks
English
Stephen
1.2K posts
Let me explain the reality of a short-term rebound, as well as why I believe the upside bands I have marked are highly unlikely to be broken...
The volume of systematic selling is decreasing, and the market is underpricing the chances of a relief rally.
As I wrote on Sunday, Trump will do everything to shift the narrative and sentiment in a positive direction; moreover, the spring tax refund season is approaching in the US, and equity selling by pension funds will also quiet down by April.
This narrative management is also evident in 0DTE positioning. I constantly see ratio put spread selling, which creates short speed exposure in the dealer profile; this essentially absorbs downside realized volatility and thus curbs momentum. Thus, if the put hedges cannot outperform theta decay, traders will close them out, which generates further buying pressure. Alongside this, I see continuous downside zomma and vomma supply in the weekly positioning, which functions as a synthetic circuit breaker and prevents downside hedges from properly capitalizing on downside momentum.
This will result in a relief.
At the same time, stagflation risk has deepened, and these effects have only just begun.
The market is trying to reprice the hard-landing narrative and is preparing for a higher interest rate environment in the future.
Also, systematic funds will remain net sellers because the volatility environment will stay high for a while longer; since they use trailing calculations, the current higher-volatility days will remain in the calculation for a few more weeks, which keeps risk metrics high and induces a net cautious positioning.
This will keep the markets under pressure.
We can see that the structural $SPX levels I previously marked and are continuously defended by the market are acting as strong support, particularly the August levels right now.
This means the market still believes the administration can manage the risks. However, as I've been saying, I expect another wave of geopolitical risk by May, specifically spiced up with domestic political issues and a slowdown around the AI sector (see my free post on $NVDA and $TSMC). Furthermore, let's add the hidden left-tail and kurtosis risk of the yen carry trade, which I have also written extensively about since last December.
And I cannot stress enough that this Iranian conflict is not over either, while China is slowly building the first island chain blockade, and due to the information war, the market cannot properly assess the risk.
These factors will produce enough extra sentiment pressure for the top to start forming.
So, I expect a short-term relief into the first half of April and another leg down, then a quick rebound and top into summer. This is how it looks to me right now. It is also important to emphasize that meanwhile, Trump is continuously losing his credibility and support, which jeopardizes the entire Trumponomics system and the April rebound.
Where is the money flowing?
Nobody wants to invest in the hundredth AI chatbot. The money is going into what physically keeps this alive: electrical grids, server farms, cooling systems, and the stable power generation required for them (a mix of natural gas, nuclear, and green energy). A massive competition is underway for the ownership of copper, lithium, and rare-earth metal mines in the developing world.
Meanwhile, investors are increasingly exiting the tech bubble, earning interest on their cash in short-term government bonds, buying defensive stocks (oil, healthcare), and waiting out the storm so they can buy up physical assets cheaply afterward.
Alma.Trk@alma271828
Since February, I’ve been saying that I expect the short-term peak of the war at the beginning of the March OpEx week. Remember? I do. And so it happened. However, it's not over yet☝️... Since last August-November, I’ve been anticipating that the most critical window of risk will be the current late April, early May period, by which time geopolitical, domestic political, economic, and market microstructure risks will accumulate. I am writing to say that the war is not over with this. You will see this starting mid-April, but the riskiest escalation window is in November. From a market perspective, this probably means something to the effect like if the market breaks through certain levels this week, we will see a rebound. In my Sunday post, I wrote that the market has been expecting this since Wednesday. Now, I will outline these quantitative levels... The first level is needed for rebound confirmation, while the second level is the main target. This is because this level determines whether the drift of the rangebound area (which has formed and was predicted since the November bottom) will be positive or negative. Watch whether the $DJI follows the trend and structure☝️Very telling it will be. I am providing its levels as well. (These levels slide dynamically. Not by much, but they do shift. I update these changes from Sunday to Sunday.) Me personally, I believe the rebound will happen anyway, and then the upper target band will face rejection; the market will reject any further positive drift. If this is true, then the top will arrive in June. The output of my model, which I shared in January, suggests exactly this, but don't be married to it. On Friday, I explained the context in a free post. Go read it😉 $SPX 6643.00 - 6802.99 $ES $ES_F 6678.69 - 6837.99 $NDX 24334.85 - 24758.65 $NQ $NQ_F 24489.81 - 24909.96 $DJI 45980.50 - 48452.64 $GLD Gold also surrendered, and it backtested the autumn-to-December levels from last year that I indicated in my post last Tuesday (March 17). I bought some, but I don't know if this is the final dip. ☝️However, I would like to draw your attention to the fact that despite the trends, the copper-to-gold ratio has made further lows and continues to diverge from 10y US treasury yields. A negative correlation in the form of convergence has occurred before, after the great stagflation of the 70s and 80s, when interest rates fell while economic output grew. After that, a positive correlation was restored. Now, the correlation is negative once again, and again in the form of divergence, ever since the spring of 2021. This is a terrible sign, and I have been sounding the alarm about it for 5 years among my clients too. The negative supply shock is intensifying and will drag the economy down with it, while the market prices in rate hikes, and Trump slowly prepares the GSEs to push down long-term MBS rates, while Bessent tries to do the same with government bonds. But this is just a delay, not a solution. Keep this firmly in mind! #stockmarket #riskmanagement #trump #gold #iranwar #oil #economy
English
@J_Davis132 Month end flow or Q1 end can give a good rally? Or at this point the selling took over and no buying took place?
English
those wondering why i dont care to capture a 120 point move up prob didnt swing long with me last week lmao
the return is not worth it with 30 VIX
let them crush vix and sweep the low and then get long
the picture is more clear than ever . c u next tuesday
HAGW
$SPX $SPY $QQQ
English
Both Balance & Gap Rules were at play throughout this week.
Hit like and I’ll drop another recording tomorrow ❤️
$ES | #ES_F | $ES_F | #EdgebyRS - Clarity First / Action Next.
RS@EdgebyRS
$ES Weekly Session Insights: 9th - 13th Mar'26 Fire up your journals, it'll pay you multifold. Exclusive Drop: Balance + Gap Rules #ES_F | $ES_F | #EdgebyRS - Clarity First / Action Next.
English
@assface_burner this guy gets it / JPM will have VIX under 23.5 just like they have for 90% of quarter end rolls the last 5 years
English
@EdgebyRS @inside_the_tape I guess lack of confidence most of the time
English
In my $ES Weekly Plan shared on Sunday…
I gave you “TRUMP TACO” region (ESH)
And on first RTH test you decide to short into it? LOL
There’s a time and level to short. At today’s low it was not the place nor time.
Thank you for your attention in this matter. 💦💦💦
#ES_F | $ES_F | #EdgebyRS - Clarity First / Action Next
RS@EdgebyRS
While you were attempting fades We held with our $ES position firm ESH 6,562 —> 6,623 Gap ✅ Don’t short into the HOLE 🕳️ #ES_F | $ES_F | #EdgebyRS - Clarity First / Action Next
English
The SPX is approaching a short-term low. We are in a time window when this market could make a short-term bounce. I will be upset if it bounces, and I'll give back my profits. I don't mind if the market drops another 5% from here, because I can find many other opportunities.
PauliB😺@PauliB64
@panpalobar Why would you close your shorts now or are you just looking for a short term bounce? Seems a bit strange when youve called a long term top?
English
$ES Levels are in reference to ESH.
Worth a read.
That’s the EdgebyRS LENS 👁️
#ES_F | $ES_F | #EdgebyRS - Clarity First / Action Next
RS@EdgebyRS
Only if you were paying attention to my chart (ESH) $ES 6,683/86 backtested upon FOMC release What have I shared with you guys earlier? "If events fail to accelerate, SELL next" On its way down ES converted 6,665 dotted line and continue to SELL. Either you keep sleeping at the wheel, or take the leap to level up as a trader with me. Choice is yours! With FOMC done, I will officially rollover tomorrow. #ES_F | $ES_F | #EdgebyRS - Clarity First / Action Next
English
@GbStephen Unlikely prior to FOMC, unless there's a headline trigger.
I'm watching 6,683/86 to guide
English
You had a second chance to short at $ES 6,750/52 (ESH) or 6,804/08 (ESM).
Down +80 Points...
Ask yourself the same question? Were you expecting a breakout ahead of FOMC? If not, then use the edges to fade for a rotation - that's your start!
#ES_F | $ES_F | #EdgebyRS - Clarity First / Action Next.
RS@EdgebyRS
That's how simple today was... ESH Gap at 6,750/52 Filled Press SELL $ES Were you expecting a breakout ahead of FOMC Tomorrow? 🤡 #ES_F | $ES_F | #EdgebyRS - Clarity First / Action Next.
English
