Morning Notes – 4/14/2022

Good Morning:

• No, not crazy. Well, not crazy about the market. As to life in general? Maybe.
• The wife did accuse me yesterday of “Doomscrolling” and why I should stop. She said being constantly connected has downsides, including getting pulled into a cycle of online negativity.
• I was dumbfounded. All I have done is point out that we are on the cusp of World War III, the country has the highest public and private debt to GDP ratio ever, inflation is at record levels for my lifetime, mortgage rates have doubled in less than a month, interest rates generally have skyrocketed, we are in an “everything bubble,” and our government is being run by inept, corrupt, lawless and autocratic commies.
• I think I am very disciplined about what I read, don’t you agree?
• The morning’s news is that Elon Musk, bless him, has made an unsolicited offer for Twitter to take it private. And Elon believes in free speech. Wow! There is yet hope that we can turn this country around.
• But since the Deep State literally owns Twitter (and CNN and MSNBC), watching them turn Elon Musk into Donal Trump will be interesting. Before long, he will be a racist, homophobe, extremist who will “threaten our democracy.”
• By the way, “Threaten our Democracy” should be added to “Putin’s Price Hike” as the new mantra of the talking head lefties.
• The offer is $54 per share, and it closed at about 46 yesterday.
• Retail sales came out this morning, and they were lower than expected. Considering both inflation and hoarding, the number is actually much worse than it first appears.
• Yesterday Treasury Secretary Janet Yellen warned countries, especially China and India, that they better get on board with punishing India and Russia. Otherwise, she may lead the charge to punish the fence-sitters financially.
• I am sure they are all shaking in their boots.
• The European Central Bank is talking tough but left rates unchanged. Familiar, isn’t it?
• And yes, I can be intermediate bearish, and short-term bullish. We need to work runs in both directions on a swing trading basis. As mentioned yesterday afternoon, we will deleverage, at the very least, today. We may go back to cash. A profit is locked in.
• Futures held a quiet overnight session until the Retail Sales report disappointed.
• Nevertheless, we look for half the volatility today compared to yesterday, with an implied move of plus or minus 0.67% or 30 points (open/close). Resistance remains at 4450, then 4475. Support shows at 4435, then 4420 (SPY420 equivalent).
• You will need to adjust my figures depending on where the market opens. If it opens below support, the stated support could become resistance and vice versa. Remember that I write these notes typically between 3:00 am and 4:00 pm PST.
• But as should be clear from the weekly chart below, 4440 is THE key inflection point at the moment. Acceptance below that level strengthens the bear case. Acceptance above hat-tips the bulls and validates the potential reversal patterns pointing to the old highs.