Weekend Wrap: First Week of 2nd Quarter Losing, Just Like February and March

This edition of the weekend wrap begins with a comment to an article on ZeroHedge

One need not read the article in question, only question the conclusion.

• markets have started pricing in a Fed policy mistake, or 
• markets have started pricing in end-of-cycle dynamics.

BOTH, FTW, or, I'll take policy mistake and end-of-cycle dynamics for $1000, Alex.

​​​​​​​This article ignores the obvious.

The policy mistake was the March rate hike. It was either too soon, or completely mis-timed. One can assert, dependent upon where one is positioned, that any and all of the Fed's policies are mistakes, but that may be significantly overstating the case.

End-of-cycle dynamics? Give us all a break. The bull market began on March 9, 2009. It's now been nine years and one month, or 119 months, whichever you prefer. Nothing lasts forever, especially bull and/or bear markets.

The Dow Transportation Index (^DJT) is all one has to watch, since the Industrials have already broken below the Feb. 8 closing low.

According to Dow Theory - which, in matters of primary trends, has a track record approaching 100% - the transports need to confirm, and that number is 10,136.61 (yes, you should have that number memorized).

Where did the transportation Index close on Friday? 10,146.37. 10 points is all there is separating this market from turning bull to bear.

After Friday's mini-crash, stocks ended the week with a significant loss from where it started the week, the month, and the quarter, predictably, the NASDAQ being the worst performer.

Forget articles, commentary, and mainstream analysis. It's all noise. The Fed has made one policy error after another (keeping rates too low, too long, and, trying to raise rates in a weakened economy) and the bull market is ending. The close on the transports below 10,136.61 will tell you exactly when the market has turned, but it's not quite there yet. It could make the move on Monday, the 9th of April, but keen minds are looking at late may or June for the turn. Either way, the bull will be dead.

While there may be a bounce in the aftermath, it will not last and there is a good likelihood of a corollary recession 6-12 months beyond the turn.

That's all one needs to know.

Dow Jones Industrial Average April Scorecard:

Date	Close	Gain/Loss	Cum. G/L
4/2/18	23,644.19	-458.92	-458.92
4/3/18	24,033.36	+389.17	-69.75
4/4/18	24,264.30	+230.94	+161.19
4/5/18	24,505.22	+240.92	+402.11
4/6/18	23,932.76	-572.46	-170.35

At the Close, Friday, April 6, 2018:
Dow Jones Industrial Average: 23,932.76, -572.46 (-2.34%)
NASDAQ: 6,915.11, -161.44 (-2.28%)
S&P 500: 2,604.47, -58.37 (-2.19%)
NYSE Composite: 12,349.11, -222.83 (-1.77%)

For the Week:
Dow: -170.35 (-0.71%)
NASDAQ: -148.33 (-2.10%)
S&P 500: -36.40 (-1.38%)
NYSE Composite: -102.95 (-0.83%)