E-Wave for the S&P 500 Index

[gdl]

SPX just announced either a short spike move or a longer one on Friday. A 5 day affair that stays below 4250? A full month affair and who knows how high it gets. March 22nd is a done deal and 25 basis point move regardless of the data. The 10 year note will hit and exceed the 4.2% ceiling of last 6 months. It should also promptly correct off and within 10 trading days easily exceed the 4.2%. WHY? Simple, the FED has decided to stay way way way behind the curve and hope and pray things work out. They know with certainty a Fed Funds that eventually hits 6% will destroy this economy. China will make sure inflation exploded right here. Their first full month after lockdown was exactly as I predicted, explosive. Tomorrow the 5th they announce their economic plan.

Labor market is so extraordinary it defies past performances. It will force the FED to (eventually) catch up with inflation. Housing already is on the cusp for a bad recession. The piggybank for homeowners will be closed. China is the perfect storm. It opens its economy at exactly the wrong time. it will spike all commodity prices and make the world suffer the consequences. There are known defined cycles for inflation. we had a glorious 40 year disinflation cycle that placed a whole generation on the assumption it stays that way. The investments and borrowing practice relied on disinflation. ONCE the 10 year yield exceeds the 4.2% ceiling of late it should spike higher.

For now i see an unusual event building up. March 22rd should cause an up spike in stocks and unusually high spike at that. Within 2 day after reality bites! An event that is truly impossible to predict but I am trying anyway. A LONG SHOT prediction.