The Momentum Cycle Tops... and Japan Problems Mount

On any other day, I'd be talking about U.S. markets, overbought conditions, and the possibility of a melt-up... But problem in Japan is looking dire.

Note: I frequently receive questions about market cycles and what we’re looking for in markets to better time and maximize profits. Right now, I’m registering no selling pressure in the S&P 500. There has been a recent surge in Moderna (MRNA), UnitedHealthcare (UNH), and some zombie biotechs.

Meanwhile, zombies like Virgin Galactic (SPCE) squeezed big… only to turn back and dump 9%. This is where, based on the cycles I’m targeting, I start to take profits and hedge. Does that mean that I’m right that this is the end of the surge? No, but I remain disciplined, and I continue to keep my powder dry.

This has been a wild six weeks… And with little selling pressure, we’ll see the markets climb the wall of worry. The question is what little snowflake can cause the next selloff or round of profit-taking. It’s a good time to tighten stops to protect profits, sell calls to generate additional income, and play the waiting game.

If you are in Weibo… continue to hold the stock (WB). It had a good earnings report and has seen a slight increase. I’d set a stop back at $8.40.

What else do you need to know?

---

Dear Fellow Traveler:

Japan's bond market is flashing warning signs that deserve your immediate attention.