What No Investment Newsletter Ever Says

DISCLAIMER: This note is intended for US recipients only and, in particular, is not directed at, nor intended to be relied upon by any UK recipients. Any information or analysis in this note is not an offer to sell or the solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice and nor should it be relied upon to make investment decisions. Read our full disclaimer, here.

Market On Close, Tuesday 10 March

by Alex King, CEO, Cestrian Capital Research, Inc.

The unsayable in the Land of the Furus is - “I don’t know”.

I am here to tell you that, I Don’t Know. Equities can rip from here - Mr. Bessent just bought $15bn of Treasuries in a not-QE-QE move; that kind of monetary stimulus is capable of lighting a fire under stocks in a good way. Or they can dump, because (i), well, look out the window, particularly if you live in the Middle East and also (ii) more importantly look at a stock chart. Most of the major names are at a level where they have held over recent support but have not broken up and over recent resistance.

Case in point, the $QQQ. Net of the $ORCL print (look for a note on that later by the way), $QQQ is sat right below the 21-day exponential moving average, the green line on the chart; this is a key short-term moving average. Below it, the QQQ can decline; above it, more likely to keep moving up.

The ORCL numbers were well received (stock up 7% on the print) and the company is big and ugly enough to be able to move the market. If the QQQ responds positively tomorrow - because there is an in-sympathy move by other tech names - and QQQ holds over that 21-day EMA, turning it into support, then I think the next bull move up is on. But if the 21-day EMA is rejected we can expect another test of the 200-day moving average - the rising purple line on the chart - which if it doesn’t hold as support means a big selloff coming.

Right here right now is a point of significant risk, the dictionary definition ie. the direction is unclear. The only wrong move at these points in time is to think you know what is going to happen (you don’t), or to make big commitments on speculative guesses (you may get lucky or you may not). Remember doing nothing is a positive act. Which is why we have ‘Do Nothing’ within our rating system!

Anyway, as I am Doing Nothing, I have some time to go write up the market. (Claude is handling the ORCL numbers as I write).

Let’s go see where markets stand.