The S&P 500 ($INX) confirmed the major (long-term) downtrend indicated at last February’s settlement. After completing a bearish spike reversal last month, the Index fell below its previous 4-month low of 5,696.61 during March before closing at 5.611.85, down 342.65 for the month. The Index has lost 9% of its highest value, with a classic definition of a “correction” being a 10% break, before turning bearish at the 20% level. Theoretical Positions: Long-term investors may have followed Warren Buffett’s lead and moved to cash given all the uncertainty in the S&P and last month’s move to a new 4-month low.
The Dow Jones Industrial Average ($DOWI) completed a bearish spike reversal during December before consolidating during January and February. The DJIA confirmed a new major (long-term) downtrend with a move to a new 4-month low during March. Theoretical Positions: Long-term investors likely sold or protected their position as the DJIA confirmed a major downtrend.
The Nasdaq ($NASX) also confirmed a new major downtrend during March as it took out its previous 4-month low of 18,112.83 (December 2024). Theoretical Positions: Long-term investors likely sold or protected their position as the Nasdaq confirmed a major downtrend.
The US 10-year T-note (ZN) is not as clear a read as it has been since the completion of the bullish 2-month reversal during October and November of 2023. For now, though, I’ll continue to call the major trend up based on the definition of higher highs and higher lows, until the ZN takes out its previous 4-month low of 107-060 from January 2025. Theoretical Positions: New longs might’ve been established near the November 2023 close of 109-150. Additional positions could’ve been established near the April 2024 close of 107-140. Another round of long positions could’ve been put in place during August 2024 as the ZN took out its Wave 1 high. Additional longs could be established near the November close, raising the overall position average to roughly 110-250. Investors could’ve added long positions on a move beyond the previous 4-month high of 111-155 (December) during March. Sell stops would be below the January low of 107-060.
