Both US Equities and Bitcoin near temporary Support

Key Takeaways

  • SPX and QQQ look to be nearing initial support after recent weakness.
  • Some of this week’s biggest areas of weakness- Transports and Semiconductor issues, are now closing in on “Make-or-Break” support which looks likely to hold on this retest.
  • Implied volatility looks attractive to own on a 2-3 month basis after its sharp decline.

The near-term market pullback intensified on Wednesday, though now lies near initial levels of support identified in yesterday’s report. Overall, I am not confident that markets need to decline right away to test February lows and I expect this will continue to be a choppy, volatile tape.  Two reasons stand out why markets might make short-term trading lows over the next 2-3 days:  First, Elliott-structure shows recent weakness having taken the form of a possible ABC correction, which has successfully held early March peaks (which now should be support for indices). Second, both S&P and QQQ have reached their respective 38.2% Fibonacci retracement areas which often can be important. Third, hourly RSI has gotten oversold, while the outsized laggards in recent days (Transports and Semis) are now nearing important support. Overall, more needs to happen to think trading lows are in, but its right to use prior lows from 4/1/22 as a guide.  Over 4507.57 in SPX and QQQ-358.59 on a close would suggest a brief rally into April expiration could be underway.  

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