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Monthly Digest | March 2021

Analyzing the key trends, events, and factors that drove market behavior in March 2021. Let's explore the pages of March 2021's trading chronicle together, unlocking the secrets that unfolded in the realm of stocks and investments.


March 01 2021

The US dominant ags are set up well coming in to this week. If we are going to start hearing about weather events effecting ags. It will happen in the next two weeks


Cotton, wheat, cattle and so on.


We have enter March. On our models combined with general seasonal patterns. We think that March could have a buying opportunity in it. Please check out the Jan 23rd weekend report. The presidential cycle charts are from Larry Williams.


MSOS pure canibus ETF will open with a buy signal this morning


Coffee chopped around for awhile but now it has taken out the old high. Next resistance 143.


Got the pattern in cocoa last week still seeing follow through. Maybe it will hold this time.


Last friday we talked about bitcoin getting a rejection signal. Today we want to see BTC close above the white 10 EMA above 48532.





March 02 2021

Patience today with oil and energy because of opec.



From Bruce Kovner


Sugar put in a reversal signal today.


Commodities across the board look like they have bottomed.


March 03 2021

Weights for portfolios and futures will be added to the letter.




XLE up today again. With the market down.



The market is not pointing to any a twist or YCC yet. Everyone is looking for powell to talk about it Tomorrow.


EGO Eldorado gold corp just came in to a buy zone today and it is reversing off of the zone.



March 04 2021

Voice messsge on where we are at today, how I’m not a big fan of how crowded the long side of the trade has become. Tightening up stops on futures. Long term portfolio, no change.


Top 3 leaders are energy stocks.



I always say how it is important to understand the general structure of the market.


This is how heavily weighted the SPX is in tech stocks. This is why it can fall as energy and other sectors rip higher.


The market looks completely different if you remove the market weighted and look at the equal weight (RSP bottom chart). We had a very thin rally on the way up. Now it is broad but technology is bloated.



See how the equal weight underperformed and now its finally outperforming.









March 05 2021




Platinum and copper are at the bottom of their implied moves. Good add points.


Both sitting on heavy support/high volume zones.


Am I spooked by Powell’s remarks... no not at all. The fed is always behind the curve and always leans on the side of inflation... why?


One word. DEBT.


They can not raise rates like they did in the 70s anymore. They can barely stop the printing press


Still cautious at the moment. (Smaller positions, moving up stops well in to profit). But sticking to the plan.


Dollar in a failure zone.



If we do take another leg up, the Dow stocks will be the one to lead it. I haven’t said this since... I’ve never said that lol.


Russia with a great set up today. Up 2% during the market sell off.


Yearly ranges are important. Similar to the opening range I talk about a lot but more significant.


YTD here is the range we want to see hold.



What a sentiment wash out lol. Nothing changes price like sentiment.


Damnit I said that backwards lol. Nothing changes sentiment like price


Price is down for a couple weeks and everyone became depressed. Reminds me of late 2019, everytime the market would dip 5% everyone would get extremely bearish.


Russell held the 10 EMA


On the daily it was rejected from the lows in the flag pattern. Another bullish signal.


Finally one of my favorite short term signals. Failed break down (oops). The most powerful patterns in TA are usually the failed patterns.


A lot of reversal bottoms today. Strong fridays lead to... strong Monday’s. Usually


The reversal in the NAZ today is interesting, will yields take a rest here. If they do the naz might lead again. If they are flat to down that won’t be the case.


My projections and models are saying that would be short lived if anything but worth noting the possibility of that over the next few weeks.


I still think there are much better places to put your money. Like small caps, micro caps, financials, energy, mining, coal, transports, shipping... I could go on LOL.


After a few crazy up weeks in February we had a shake out last week. This week was pretty flat which was nice considering all of the volatility thanks to my concentration on the strong sectors. Ended the week up 4.1%. Catastrophic stop at 17%.



March 06 2021


Against All Odds-March 6


Blue section-Don’t forget the plan:

Equities - Cautiously bullish - as always risk management is key. No switch to a bearish posture yet but sticking to the strongest sectors and indices. Small caps, Energy, financials and commodity based countries.

Do not cap the upside by taking profits on the way up. I will be holding on to my positions. All of my positions are well into profit since these trades started in October/November.


Understanding our framework.


Our narrative, crowd psychology, trading regime and technical models have to link up with our trade horizons. The trade horizon I look for is the intermediate term trends. 1-6 months is my general trade time frame for futures and the ideas behind those trades usually last much longer. 6 months to 16 months  is my general time frame for my long term portfolio. In a world of instant gratification I think that finding these major swings while everyone is trying to trade for the month end or quarter end has enormous potential. You can also use what I do to stay on the right side of the trends in the shorter term while I stick to this timeline. This also means that our stops have to be wide enough to disprove our hypothesis. 


The market cares about the rate of change of macro data. So, we care about the rate of change of data as well. The market cares about positioning and sector/asset rotation so we care about those things as well. The market reacts to its ability to discount news so we dig into that as well. The major part of our fundamental framework uses data and intermarket analysis to assess where we are at in the economic cycle. Most of the time the data will lag the intermarket analysis. When that happens we will trust the price action over the fundamentals. At the moment we are in an inflationary/expansionary phase. We think that there will be corrections and at some point inflation will put so much pressure on the market that stagflation is a likely scenario.


At the moment it looks like an asian/commodity country led economic recovery and we are staying away from Europe for the most part. The only way out of this amount of debt in these economies is currency depreciation. Something that these developed economies have not seen in many years but emerging economies have seen this before.


US Sectors


What a reversal when it comes to style factors.


Brazil showing some extreme divergence last week


Major currencies, six months


Major currencies, six months


Yields


Yields


CCC performing much better than High grade debt... still. Risk on?


Intermarket analysis/Dow charts


  1. Intermarket analysis/Dow charts


2. Intermarket analysis/Dow charts


3. TRANSPORTS/DOW. Both at new closing highs


4. Risk on still rules


5. CRB/USB


6. Silver to gold ratio


7. GDXJ/GDX


8. GDX/GLD


9. KRE:SPY SPI in red


10. XLK:QQQ if the FAANGs are going to bounce, it would happen here.


11 CL:SPY Oil SPX ratio. Breadth and sentiment


March 07 2021

 1. Equal weight SPX at a new weekly closing high


NYMO bouncing from oversold


NOYAD (Blue). Small cap AD (Red)


Bull/Bear chart holding strong


VIX Model


SPY Seasonality


All signals here point to a short term bottom.


BDI/XME


GDX Breadth. Positions/Trades



BTC system still long from October 7th. What do we really know about the future. Nothing! What you can do is create systems that gets you in at the beginning of trends and out as close to the end as possible. Thats it! Trend following is not the right way of saying it. It's much more.



Bitcoin seasonality


Soybeans. Still long.


Copper-long: inside day


XLE energy weekly-long: Closed over the 200 week MA for the first tie since 2019


XME weekly


KRE A lot of all time closing highs


RSX Russia with a band squeeze break out set up. Buying above 25.72 to confirm.


Wheat. Numbers come out on Tuesday


Lumber. Also in live with the back to school trades.


WOOD. Global Timber and forestry. Long ready to break higher


30 year bonds-made it all the way back to the 200 week MA. Still short.


Cocoa


Cocoa seasonality


Natural Gas Trading like Natural gas


Platinum coming all the way back to value


GDX


Coffee not as bad as it looks


I always like these failed break down patterns


The taget we have been looking at since November got hit but I dont see a reason to close the trade yet.


Dollar


Ending note, lets talk about sentiment.




Some highlights from hedge fund market wizards




March 08 2021

Everyone got short last week



From Shawn Hackett


Equal weight SPX at new highs


GDX putting in a versal bottom. Needs to clear 32.03 to confirm


March 09 2021

Ok this is very interesting. Insider buying in the NAZ has hit a major point


Still not a fan of the naz in this environment but I can't deny that signal.


We have an interesting set up right now. Yields are overbought badly so they need to fall


The dollar is overbought badly as well. This type of set up usually leads to a massive bounce in the precious metals


Bitcoin likes this environment as well


Currencies work well with mean reversion systems. If we get a bounce from the 40 MA (teal line and clear yesterdays high. We will get a buy signal. GBPUSD


WASDE at noon. Working on some new chartlists and editing old ones on stock charts. If you have a stockcharts account let me know and Ill pass it your way


March 10 2021

"The stock market is never obvious. It is designed to fool most of the people, most of the time."

-Jesse Livermore



Tim just brought up that NG is in a good zone. High volume zone.


March 11 2021




OJ resistance becoming support set up


OJ resistance becoming support set up


OJ resistance becoming support set up


RGR


Good moves in the long term portfolio today


RSX band squeeze break out


March 12 2021

"…given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited, and we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system.”


–May 17, 2007 Remarks of Ben Bernanke at Federal Reserve Bank of Chicago’s 43rd Annual Conference on Bank Structure and Competition, Chicago, Illinois


Don’t worry there is no inflation either.


Crop conditions continue to falter.


The back to school trade is working out well.


The miners fell and bounced off of the island. Bullish.


March 13 2021

Week ending March 12th, futures portfolio ended up 11.27%. MTD 14.26%. Up 57.58% on the year. (If anyone ever wants to ask me to see those numbers you are more than welcome to. Transparency is important) Catastrophic stop is at 21%. Which widened from last week as we are working off of some oversold situations.


Everyone has opinions on inflation... this book will give you the background that you need to understand it better than most.

jens-parsson-dying-of-money-24
.pdf
Download PDF • 916KB

The short update this weekend wont be going over the macro markets. We are going to talk about getting shaken out of your trade ideas.


As traders start they get blinded by the thought of how much money they think they can make. Then after making some they usually give it all back and then some.


The next step is when you know shit. All types of shit. You know things about how to trade, why to trade, when to trade... then you are very timid after you make profits because you live in fear of giving profits back again.


all dates pointed out have significance


Did anyone listen to the bond market in 2018? What was the difference with the bottom then and now?


How we miss trades based on our bias. Then when it gets to a certain level we take the other side of the trade... We all miss trades. How do we move on? Trends on yield curve control


Google trends for operation twist


People searching the term treasury bonds... each of the peaks were at tops. This one? Not sure.


The old, "this has been going on for a long time and it will continue because of this even though I have sell signals, I'll look to buy at support."


Also when do we shift and why


How do we stay interested in a sector after we have got our asses kicked for the last 10 years?


March 14 2021

Don’t get attached to positions just because they have made you money.


When there is a ton of negative news around us. The election, Europe shut down and everyone thinks that the markets going to crash again. Then you get this pattern in oil.


When bonds are trading like it’s the Great Depression


You sometimes have to think that it might not be a Great Depression.


What causes crashes are divergences. This is why we constantly look at breadth, volatility, commodities, sectors... nothing can make every trade work but our goal is to stay on the right side of the trends.



Now you have your idea. The environment went from stagflation to reflation. The market starts hinting at growth. Banks are showing relative strength. How do you trade it? Intermarket analysis is a great hint.


After the macro outlook, the inter market analysis and then taking your backtested signals (once again if you have no idea what your win rate is, you cant properly understand your risk to reward) Now you enter the trade. I entered on the break down of the rising wedge. The red line is an chande stop set to a certain atr. This will change based on your trading style.


Buying high to sell higher and also understanding that we can always be wrong and fully accepting that fact


We talked about this before, being able to hope for the best and expect the worst.


Hopefully someone understands this lol


A couple charts for next week



Small caps coming back


Transports still storng


We need to watch oil here. Up or down.



March 15 2021


In line with the weekend report


As a person who’s done this for awhile, I get the same argument from people over and over again when I say. “Don’t take anyone’s trade ideas including my trade ideas.” From others, you might learn what a process looks like (which is the point of this page, to show what trading really looks like and it’s not always pretty) but you won’t learn a damn thing from someone saying BUY _____ without understanding why they did or when they would get out to the upside or downside. 


To make money over and over again you have to understand why. Why do you put on a trade? Your answer can’t be “I wait for a signal from _ on Twitter”


You also don’t want to say. “I put on a trade but someone had the opposite view so I took it off”


You also don’t want self doubt to creep in and say “this person is smarter than me. That’s why he’s on CNBC and I’m not”


If you put in the effort and backtest and really understand your systems. You can beat 99% of the pros.



Things to keep in mind this week.


  • Expiration weeks are usually bullish.

  • Bonds usually bounce in late March

  • Gold usually bottoms in March or April

  • Best six months for stocks ends in April

  • And April is one hell of a month for stocks historically speaking.

  • Seasonality isn’t a 100% thing but it’s good to keep your eyes on it.




Major breadth divergences between NDX, Dow and small caps


Uranium breaking out of the flat and over Volume resistance


Why do I still use the oldest form of technical analysis? Because it works


I always say that manipulation can not be sustained. I don't think many people understand what I mean by that. This is a good explanation


I always say that manipulation can not be sustained. I don't think many people understand what I mean by that. This is a good explanation.


March 16 2021

Bitcoin got a new high and slipped back. It still has major divergences. Couple strikes for BTC


Another high in URNM


NKD dollar denominated Nikkei futures ready to move to a new high


Fully long OJ now as I got a buy signal. We have a run to 130 in the short term. In the long term the projection hits 157


March 17 2021

Currency traders. Brazil is most likely hiking today


The Real could get strong here.


The major ag cycles usually involved the Brazilian real. This is when the ags really take off. They are strong now but the parabolic moves come when the real follows.


Coffee putting I’m a major reversal pattern. We are finally at my short term target. Later than I thought.




I keep getting questions about corn. This is why it’s important to understand the curve. I kept bringing up that I was buying the dec 2022 contract. The front month isn’t losing money but the curve was playing catch up.



Palladium reversal off of the pivot is still moving. Finally breaking out of the range


March 18 2021



Regional banks firmly at ATH


On positioning and the fed


Palladium moving higher


Gasoline, heating oil and oil have hit the bottom of an implied move. All of these are in solid up trends. This is the only time when technical traders should use oversold signals to buy.

Look for upward momentum before buying. I like to use 4 hour chart divergence signals.


Usually when the ROC gets this extended on any product we usually see sideways action. Since the trade entry was awhile ago my trailing stop now is 162.23. Around this point. i would expect things to move in a range for awhile. The long term move is 12 dollars. (bonds are not very volatile which is why you need leverage to trade them well) ZB is the 30 year bond future.



People are still overlooking the transports. Some great names in this


Heating Oil


Gasoline


Oil came down to its monthly pivot


We went though this with BTC


The first sell off usually gets bought but we have to be patient and wait for the right time to jump in


March 19 2021

Week to date US gasoline demand is running 2.8% ABOVE the last pre-COVID week 3/8/20


Gas buddy data



I got some quad witch questions this week (triple witch) now that it’s actually triple witch and not the media talking about it. I’ll explain it.



March 20 2021



I’m not much of a candlestick guy. But has anyone seen gold monthly candle.


March 21 2021

This weeks report will be short as well. I have an interview for our group with Netto on Monday. Also I hurt my knee pretty badly so I am going to just do what I can today and tomorrow.


1. Backtesting, what do we mean by risk and reward


2. I am always talking about what happens when you put your stop too close. This system that beat bitcoin, now, its only up 134% when bitcoin is up over 20000%


3. Lets say your a crazy person and you say, I am going to just enter the second after I get stopped out again and again. You've cut your returns in half


4. This is from chart number one. It is insanely hard to outperform bitcoin. However to just hold on to bitcoin is another problem. You also dont know how you will act when you get a drawdown of 80-95% (which happens) Personally I think holding a bit and trading can be kept separated.


 5. Why it’s hard for people to go with the trend. First part of this convo.


6. I always talk about buying the highs and getting out at a certain low. This is one of my gold trend models.


7. Common stock AD volume


8. NYAD and Small cap AD


9. SPX on top Equal weight SPX on bottom. Still leading


10. Vix model. No warnings, yet


11. Bull bear model. Still bullish