Turnaround Tuesday on March 10, Marks A Turning Point

This column is my opinion and expresses my views. Those views can change at a moments notice when the market changes. I am not right all the time and I do not expect to be. I disclose all my positions clearly listed on the page, and I do not trade my account on the stocks spoken of in this column unless fully disclosed. If that does not work for you stop reading and close the page. Do not bother me or harass me.

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March 10, 2020

Stocks: None

Marco: SPY, Spreads, Dollar

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Well, if you didn’t listen to the audio file from this morning, I’m sorry. I wish you had, particularly starting around the 5-minute mark. If you did listen, then you know what I am talking about.

Turnaround Tuesday

That was pretty much a perfect textbook day. I couldn’t have drawn it out any better. If today wasn’t the bottom, then we have much bigger problems on our hands.

The big gap open, the big sell-off, retesting yesterday’s lows, the hold and that late end of day surge. Wow. Perfect. Even better, we took out resistance at 2,855 after failing two times earlier in the day to close at the day’s high at 2,882.

spx, spy

Now 2,855 once again become support, and even better, we have another significant support level down around 2,735.

I think this means that we ultimately look to fill that gap up to 2,986. I am just putting a caution zone in at 2,900, in case.

Looking for Confirmation

So how do we confirm today’s rally as an official turnaround Tuesday, bottom in, day? Well, that is pretty easy gap lower tomorrow fall to around 2,855, and the rest of the day fill the gap up and push above today’s close. It wouuld reverses the current trend, which has been gap higher and trade lower all day.

The good news the RSI is starting to trend higher too.

spx, sp500

Spreads

And, like I have been saying, the equity market is merely following the spreads on bonds, and those rose sharply today too. The USDE10YR is on the cusp of breaking the downtrend, and that is a big deal. It could mean that 10-year rises back to over 1%.

us10y-de10y spread

Dollar Index (DXY)

The dollar index had a great day, too, also rising sharply. Notice any patterns.

dollar

Anyway, I’m tired, and I’m taking the rest of the day off. I think I deserve this one.

-Mike

Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future results.    

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