E Market Briefing For Monday, March 25

Boeing is a great example; because (for instance the Dreamliner 787's) 'world-class' airplane, reflect how these days components are sourced from many places. It's something you can't really interrupt. Even Airbus, despite their huge mistake of misjudging the market and focusing on the albatross of an older-era aircraft (the A380 which creates incredible costs to operate, and challenges airports with arrival and departure traffic and other issues), rather than shifting to more moderate aircraft like (now) the popular A321 / Neo and A330; competing with Boeing's 787 and 777. In this scenario I doubt China or anyone else is going to cripple themselves by aligning only with Airbus; although the market is concerned about it. 

Technicals have telegraphed the evolution of this pattern as outlined, really in a progressive (and painstaking) way over the last two months. I was glad to take extra time often to make my points as to why I believed rallies had limited potential, while lots of risk loomed below the ranging levels around S&P 2750 'inflection', that we did our best to navigate. 

Now that the market has fulfilled the pattern projections (that doesn't by any stretch mean declines are over) around that tricky distribution zone, we can speculate about 'free-fall' risks if the algorithmic after-the-fact sort of players effect an exodus. I believed the smart money was selling rallies for many weeks now while statistics strangely tried to argue that. Really it was an effort of hedgers and fund managers (as I suspected) to throw money/leverage at markets in a 'Hail Mary' attempt to stave off selling. 

It's a reason (back in January) that I described the parabolic advance as a bearish move because they knew the prospect if they 'let go'. And as I projected the February breakdown, I talked about now the extension they engineered, would actually enhance the downside by forestalling normal corrective actions. Most institutions I presume, because they were overly leveraged or just flat-out fully invested (which I've pointed out is folly this year) were over-impressed with themselves and thought they could defy not just the Fed, but gravity. 

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Gene Inger 2 years ago Author's comment

Enjoying the 'crash'... we first warned of 'crash conditions' underlying the market back on Jan. 25 and 26; and again when I spoke at TraderExpo in New Your a month ago. Just so you know, we are offering a 'rebate' coincidentally because it's Easter / Passover week. It's $30 for a Daily Briefing and $100. for MarketCast subscriptions and won't be repeated anytime soon. We only do this 3 times a year for new members at www.ingerletter.com and in-addition you'll get the comments immediately not on a multi-day delayed basis (they are intended to be only excerpts here). Also I will be speaking at TraderExpo in Chicago in July; which will be well after the Crash has mostly run it's course...or as we'll outline along the way. Join us for the journey if you feel we've (in all humility) nailed this market; as we're not going to often permit full quotation of my thoughts in the future...Happy Holidays and please visit www.ingerletter.com to join. Gene