The Two Percent Solution

There is still no equity T, and the likelihood of one forming soon is not in the cards. But while there has been no T in equities, we have reached a new high in the SPX. There will be a time when it is clear that the trend is over. Right now, I can only suggest that the first crack is about 2% below us. The Two Percent Solution is to watch how Price reacts to support, with that important support 2% below us.

Percentage Change on Major Asset Classes:

Asset	Month	Week	YTD
SPX	2.89	2.29	9.74
TLT	1.78	1.12	-4.35
IWM	3.08	1.57	2.43
GLD	6.82	0.32	4.8
GDX	13.15	0.97	-4.55
QQQ	2.03	3.01	9.15

Looking at SPX on an hourly basis, there is support at 5190, using the standard 55 Optimum Moving Average Keltner chart:

MACD has crossed negatively, and RSI and MFI are trying to recover from an overbought situation, while still remaining above their neutral levels. (Disregard the time stamp on the above chart, as StockCharts is having some issues–the date is at the close of Friday, March 22 2024.)

Looking at the Hourly Volume Oscillator, the $NYUD is approaching a level from which it should rally further, if Price is going to maintain its upward movement. Look for an initial move slightly lower on the VO, to be followed by a recovery. If Price starts to break down after the VO recovers, that will be a sign of future problems.

Another chart to watch at this point is the Simple vs Complex Structure chart. The present structure is a Complex Bullish one, and will remain so until the VO crosses the zero line. (It will be adjusted Monday to closer match the McOsci.)

On the SPX daily chart basis, we have moved below the upper Keltner on the Bull run “NDX” version of the Companion Chart. As I’ve noted, while this shorter period Optimum Moving Average of 35 has contained the upper region of this chart as resistance, the 20 EMA has been extremely important support since the beginning of this year. First support is 5140, less than 2% below where we are today. Secondary support is 5076. On the normal Companion Chart, support is at 4995.

Last week I discussed the GLD T that I saw as ending. While we did have a major spike on Wednesday, GLD managed only a slight increase for the week. That being said, it is still holding the 55 EMA.

The potential for this to extend until April 7 still exists, unless we break decisively below the middle Keltner. I have withdrawn from this T.

I have one last item to discuss. In the past, I have looked at the IWM/SPY ratio, and considered using IWM as a way to short equities versus SPY. In late 2020, I became a fan of IWM vs SPY as the ratio passed 47%. My long term chart (and posts on elliottwavetrader,net) regarding this ratio reflected that I maintained this belief for about a year, after which I began once again using it as a hedged short vs SPY. The chart resides on the Revised chart web page as follows:

With the ratio this low, I don’t find that to be of value at this time. Let’s see if the higher lows can hold, even as the ratio continues to decrease:

I don’t like IWM, but I think that a review of its largest holdings in order:

What is holding IWM up?

Take care.