The markets let us know

Here's where I expect things to go next

A lot has happened in the last week since I wrote "The Market Will Let Us Know" where it wants to go. S&P 4250 was the KEY LEVEL to watch… The stock market and currency were absolutely CRUSHED… not here in the U.S., but in Russia, with the ruble in rubble as stocks dropped 50% in days. Truth be told Russia's economy is tiny compared to America's economic might. In fact, America has an economy TWENTY TIMES larger in GDP. This was a simple case where we sold the rumor and bought the fact. Here at home, stocks bought the fact of the invasion of Ukraine with a big bounce to put in a bottom. Technically speaking, price not politics, the test and reject of the January lows. A higher weekly close in the S&P 500 broad market barometer was the capitulation needed to shift sentiment.

Stocks got bad enough to buy and the follow-through action has been encouraging, but it needs to get above the last swing highs to shake out the shorts once again. For me, the key bullish indicator is the divergence in the fear factor $VIX… though socks made new extreme swing lows, volatility did not make new highs as a sign that sellers had run out of strength. That divergence in the $VIX is how bottoms have been made in the last decade!!! Any additional analysis of the global impacts is just opinion and conjecture…price is king. As said before, the price action is important as well as the reaction… the fakeout shakeout is significant and the market will tell us if it is the real deal in the sessions ahead…

The markets move quick, but we can respond quickly, too. Remember, we don't work for the markets. We make the markets work for us. Alan Knuckamn P.S.: In times like these, it's ultra-important to follow the elite money traveling through Wall Street. For more on how to do that, catch this critical presentation.

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