S&P 500 FuturesВ ( /ES) pay $50 per point and we're below the 50-day moving average at 4,416 вЂ“ so that would be the stop line and 4,320 is the strong bounce line and, failing that, we have no support at all until the weak bounce line at 4,180 вЂ“ 200 points below where we are this morningВ (4,385). Last Tuesday, in our morning PSW Report ( which you can subscribe to here)В I asked you if you would like to make a quick $10,000, saying: From 4,800 a 33% correction would be about 3,200 вЂ“ the top of where we corrected fromВ last time and, from a LONG-term perspective, that would be nice consoldation for the decade ahead and still better than the 60% correction we had in 2008/9, right? Look what a mess the S&P is already:Д«ut, of course, if you look at it in perspective, this is only a minor correction at best:Д¬ovid alone took us from 3,300 to 2,200 (33%) in early 2020 and now that's just one of the things we are worried about. If these levels fail, you can't even imagine the carnage that lies below us.

So, very simply, if the Nasdaq turns green we have some hope but if the Russell turns red вЂ“ we need to add more hedges and consider cashing out completely. RussellВ 1,600, would be about an 800-point drop with 160-point bounces to 1,760В (weak) and 1,920В (strong)

14,100В is the weak bounce and 14,700В is strong. With Q1 GDP coming out on Thursday, what we're really concerned with is whether or not the indexes can stay out of our 20% correction range, which makes 13,500 on the Nasdaq hyper-critical as we crashed below the 20% correction line there as well as 1,920 on the Russell, which is our only index where we prediced more than a 20% correction LAST YEAR, when we began using this chart:Дow 36,000 to 28,800 would be a 7,200-point drop with 1,440 bounces to 30,240В (weak) and 31,680В (strong). We've run out of stumulus, which causes more inflation that we're trying to fight now anyway вЂ“ so what are we going to do if we're hit with another wave of Covid? 1/4 (80M) of the US population has already gotten Covid and 1/3 of the population (110M) refuse to be vaccinated or take most precautions so there's essentially no way to get rid of this thing and the only question is how severe the next wave will be? It's not a political question вЂ“ it's an economical one. There's been a 50% rise in infections in the US this month and China is locked down but most of the rest of the World is just pretending it isn't happening. We've got Apple and Google and Twitter and Meta, on Boeing on Qualcom, on Intel and Visa! Santa would be exhausted by the time he got through calling out our S&P high-flyers and, so far, investors have been in a punishing mood вЂ“ using any hint of weakness as an excuse to dump their holdings.ДЄll this is coming against a background of not IF but WHEN there will be a recession while war continues to rage in the Ukraine and Covid continues to rage around the World, Oh yes, and don't forget inflation, which is completely out of control with no end in sight вЂ“ that's bad too.

Carli ishare