2 replies to this topic

[Douglas]

According to my turn probability summation system the days this week with the highest chance of seeing a turn in or acceleration of the current trend in the DJIA are Monday March 2nd, Tuesday March 3rd and Friday March 6th with the higher readings near the front of the week which is curious since the system does not have any indicators related to war or conflict.  Also although adjacent, it appears to me that the Monday and Tuesday turn days probably represent separate events and not one larger turn window.  Not exactly sure what that means, but maybe whipsaw action.

 

Last week the Monday February 23rd and Friday February 27th turn windows tagged the sharp drop days and what appear to be lows although the trading on Monday March 2nd might change that description of Friday's turn window.  

 

 

Although I call the Iran conflict a war, it can't be a war since only the US Congress can declare war according to Article 1 of the Constitution and it hasn't done this since 1942.  So like Korea, Vietnam, Iraq, etc. this is not a war, just a defence associated industry restocking exercise, clearing out the old bullet, missile and bomb inventory to make way for new stock I suppose. 

 

My favorite 1970's  bumper sticker said "War is good for business, invest your son".  Given its business friendliness, it's hard to know just how the stock market will react this coming Monday.  Could go up due to all the shinny new miliary associated stuff that has to be ordered, or it could go down do to the reduced supply of oil which could drive up manufacturing cost and inflation.  Rothschild suggested buying on the sound of cannons, the start of the war, and selling on the sound of trumpets, the denouement of the conflict so that would appear to vote for up as well.  I don't have a clue.  It sure looks like the start of the conflict just outside of NYSE hours was chosen to minimize stock exchange disruption, since it clearly is now the economic tide of choice lifting all boats, well at least the yachts on the top of the "K". 

 

Regards,

Douglas 

Edited by Douglas, 01 March 2026 - 07:51 AM.

[Douglas]

Sorry about the double post.  Not sure how I managed to do that.  Must have doubled clicked on the post button.  Anyway.  Sentiment has topped and rolled over as can be seen in the plot below of the average percentage bulls of the surveys that I track.  It made a lower peak a few weeks ago and is diverging with the DJIA which should be negative unless the Fed steps up pumping to support the war.  More funny money will trump sentiment every time.

 

 

The investment managers exposure index also peaked and is diverging which should be a drag on the indexes.

 

 

Regards,

Douglas

Edited by Douglas, 01 March 2026 - 12:57 PM.

[Douglas]

That channel that I drew in the hourly finviz.com plot in the post above has been breached this morning and the green bottom line is now being tested.  The gap above is probably calling out to the DJIA for closure, so that channel break test could certainly fail.  If the line test holds and the war news deteriorates, a real plunge could be seen.  My system's crash risk window does not show up until a bit closer to the middle of March, so a plunge right now is not my primary outlook, but maybe it's close enough to the ides for horse shoes and hand grenades.  

 

 

Regards,

Douglas