Note: There won’t be a video today, as I’m currently traveling. Thank you for understanding.

Short-term rallies look likely for US Equities along with most of Europe and Far East Equities after the initial pullback over the last couple of weeks. However, given that many indices have the same near-term wave structure, it’s thought that bounces into late March would prove to be selling opportunities for an additional decline, which could take place into April expiration.  The US Dollar might start to diverge with TNX on a short-term basis, as there looks to be a coming selloff approaching for DXY, while most Energy stocks also look fatigued and might require consolidation. The combination of our recent reflation trade pulling back could be a temporary good sign for the outlook for Equities in the short run, and my expectation is for a 150-200 point S&P rally, which might carry SPX to near late February highs near 6950.  However, it’s hard to say with confidence that the selling pressure that started last month has run its course, and I’m increasingly expecting that another wave lower could be possible into April. Overall, the short-term path for Equities looks favorable over the next week, but I’m not expecting a push back to new highs in the near future.

If the near-term pattern analysis of many global indices is any gauge for how U.S. equities might act over the next month, I expect that there still could be lots of volatility and a trading-type environment that favors being opportunistic vs. a buy-and-hold between now and late April.

^SPX-0.21% ’s minor pullback into Wednesday looks nearly complete, technically speaking, and I suspect this could begin to lead higher over the next week with targets up near 6950.

As shown below, Wednesday’s weakness retraced down to a 50% retracement of the rally off this past Monday’s lows.

This appears like a favorable risk/reward for long positions in what could be a bullish push higher in the weeks to come.

S&P 500 Index

NIKKEI analysis provides some clues about a possible trajectory for US Stocks in the next couple of months

It’s normally helpful to examine other countries’ index patterns when a large setback happens, like what occurred from late February into March for many global indices.

Both Japanese NIKKEI along with Euro-STOXX 50 (not shown) have a remarkably similar pattern which was also seen to a lesser extent in US Stock indices over the last month.

With regards to NIKKEI (shown here as Japanese Nikkei Futures), this decline from the peak occurred as a five-wave movement lower, similar to what happened on the Euro-STOXX.

These indices have since stabilized and begun to rally over the past week.  However, I suspect that the patterns here could also be important to the ^SPX-0.21%  in showing strength over the next few weeks before a leg lower into April.

Specifically, when a large five-wave decline (based on Elliott-wave structure) from the peak, it gives a signal that further downside is likely to get underway once a bounce plays out.

In this case, the pattern suggests near-term relief and a rally are likely approaching, but that selling pressure likely could play out again in another month.

Nikkei 225 Futures

Japanese Yen looks close to bottoming;  Expecting a big reversal lower in USDJPY over the next couple of months

Following up on yesterday’s comments on the US Dollar, the Japanese Yen looks to be nearing important levels vs. the US Dollar, which I believe should provide solid resistance for USDJPY before it begins to turn back lower.

Given that many of the major currencies (Similar to the Yen)  look to be close to turning back up vs. the US Dollar, this could provide some confidence that the recent spike in the US Dollar could be nearing its conclusion and turn back lower.

This former reflationary trade, which has happened frequently over the years during periods of geopolitical tension, should be close to turning back down for the US Dollar.

Specifically for the Japanese Yen, any daily close under 157.27 should arguably lead lower to undercut 150 in the next couple of months for USDJPY before this finds support and begins to turn back higher.  

Thus, I like being long the Yen, and ETFs like YCL-1.04%  (Proshares Ultra Yen ETF) could help to give some exposure to a sharp rally in the Yen for those who are not active in Foreign Exchange.

U.S. Dollar/ Japanese Yen

Natural Gas cycle should start to trend higher in the months to come

Following up on my comments on Natural Gas turning higher, I felt it was helpful to potentially show what my cycle composite on Natural Gas shows for the months ahead.

As shown below, this composite looks to be bottoming and should allow for a decent rally in the months to come.

The cycles that have shown some of the greatest accuracy involve combining a 192-day cycle with a 129-day cycle.  This composite has shown several impressive peaks and troughs, which were close to lining up with the prior movement in Natural Gas.

If this were to continue, then most of 2026 is thought to be bullish for Natural Gas, but specifically, the next 1-2 months should allow for a further bounce.

Natural Gas Cycle Composite