Following are my personal comments on specific markets and issues. I chart markets for a hobby and my comments are the result. They are not recommendations to buy or sell anything and should not be thought of as such. They are for entertainment purposes only so enjoy.
Please remember, the following is pure speculation based only on my experience and chart patterns. "Every sunken ship has a room full of charts."
David Bruce Edwards
March 28, 2026
Note - I got a new wider screen monitor and when I look at this web site with the screen size in full, the site spacing does not come out properly. By making the window less wide all of the text and graphics slide into place. Perhaps you are having the same experience. DBE.
As usual, I will show pictures and graphs found on Zerohedge.com, Sentimentrader.com, which include the Seasonality charts and charts made on Barchart.com. I will also mention "cycle low timing bands" suggested by another market website to which I subscribe, Cyclesman.com.
Hour by hour war news continued to dominate trading. Economic statistics were a minor influence. Here are a few from the last two weeks.
U S Industrial Production (upper left) rose 0.2% month over month and 1.44% annually, slightly better than estimates. Manufacturing Output (upper right) was also up a bit, rising 0.2% for the month. Capacity utilization rose to 76.3%. None of these numbers were big jumps but they continued the trend of slightly better performance by the industrial side of the economy.
Producer Prices (upper left) rose 0.7% in February, much hotter than anticipated. This lifted the year over year gain to 3.4%. Tariffs got the blame but the details behind the headline numbers showed that more than half of the rise came from services, mainly transportation and warehousing. Goods were up 1.1% with forty percent of that coming from food prices. These numbers were before the Iran war started so March readings will be worse.
When food and energy are taken out of the equation (upper right), the month over month increase was 0.5% with an annual increase of 3.9%, almost double the Fed's 2% target.
With Producer Prices outpacing Consumer Prices, corporate margins are down (left).
Import prices rose 1.5% month over month. The last green bar on the upper left side graph puts the increase into perspective. Raw materials were up but the biggest contributor was the cost of memory chips (right side) amid a world-wide shortage. Thursday, Google announced that they have a new chip for data centers that will result in a huge increase in efficiency and they won't need all of the memory chips that current data centers require. Prices for memory chips fell on the news and so did the share price of the companies that make them. Regular readers know that I have been warning that we are in the early innings of the data center innovation cycle. Before it is over, not only will there be less need for memory but it is likely that the energy needed will be a fraction of what the current technology requires.
The green line in the left side graph tracks the difference between estimates of inflation and the actual data. The red line does the same for economic growth. Both lines are going in the opposite direction of what you want to see in a healthy economy. The right side graph shows an index of food prices (blue) and fertilizer prices. The article from which this chart comes stressed that in the past, fertilizer prices led food prices.
New Claims for Unemployment Benefits came in at 210,000 (left), continuing the streak of businesses keeping employees. You have to go back to 1969 to find a similar period of low layoffs. The four week moving average of New Claims and Continuing Claims (right) also fell.
Everyone is watching the price of oil. These graphs show West Texas Intermediate, our domestic contract for different time frames. The upper left chart highlights the recent price increase after we attacked Iran. The upper right graph is from last week. Going into the weekend, traders bought oil, anticipating more attacks on the energy infrastructure of Middle East oil and gas producers. The graph directly to the right goes back to 1998. Oil traded above $100 for a very limited time over the last quarter of a century. While no one wants to be short this market, traders know that if there is any move toward a cease fire and an opening of the Straits, energy prices will fall quickly.
It is the opposite for markets that sold off amid worries about higher energy prices. This increases the risk of losses for everyone who is betting on one side or the other. Hedge funds and money managers are liquidating positions in all markets and going to cash to avoid being whip sawed by good news that is denied a few minutes later.
Gasoline futures are up $1 from pre-invaision levels. Heating Oil, a proxy for diesel, doubled in price. Is there a shortage of these commodities in the United States? The latest government statistics are from the week of March 20th. Crude Oil inventories, excluding the government's Strategic Reserve, are 0.1% above the five year average for this time of the year. Gasoline in storage is 3% above the average and distillates are 0.4% below. There is no domestic shortage. Traders are anticipating that fleets of tankers will head to the U.S. Gulf Coast and bid up prices for delivery to areas of the world that are running out of fuel. If a cease fire is announced, heating oil and gasoline will drop immediately.
On the lower left is a graph of UNG, an ETF that tracks domestic Natural Gas prices. I put yellow rectangles over winter months when we usually see price increases due to cold weather demand. 20% of the world's Liquefied Natural Gas comes through the Straits and is now unavailable. Qatar is the biggest supplier and due to attacks on its LNG plants, even if the war ended today, 17% of its capacity will be off line for three to five years. Why aren't U.S. Natural Gas prices higher? Because there is a huge surplus of Natural Gas in the United States. Natural Gas has to be cooled into liquid form to ship overseas. The Biden administration halted permits for new plants. President Trump reversed that decision and there are many projects under construction but you can see from the lower right side chart that the big increase in exports is two years away.
By week's end, the energy sector was the big winner. The left side graph shows XLE, the ETF that includes all the majors. Below is a simple RSI momentum oscillator with yellow rectangles marking previous periods when it was near the top of its range. The first, around the Russian invasion persisted for four months. While the party lasts, everyone is making money, but, a deal to open the Straits would cause a plunge in prices. On the right is a graph of the daily closing price of XLE and WTI Crude Oil. The yellow rectangle marks the value of XLE the last time the nearby futures contract closed a week at around $100. The difference was that traders were pricing in future lower energy complex profits. It marked a low for XLE. Now, they see unlimited profits.
Gold was supposed to be a hedge against war, chaos and inflation. Instead, it hit the skids like everything else. Regular readers know that I warned that in a crisis, everything that can be sold to raise cash will be sold. Turkey's gold reserves fell by 6 tons the week of March 13th and another 52.4 tons the week of March 20th. They sold some of it and posted some of it as collateral for loans. Lenders usually sell futures and forwards against the collateral to lock in its value. Most of the Middle East oil producers whose revenues are now choked off, depend on the cash flow from oil to fund their governments and many of them borrowed heavily over the last few years so their cash flow needs are amplified. How many will start selling gold and stocks from sovereign wealth funds to make up for the billions of dollars per week they are not getting from energy related sales?
The upper two graphs show the latest steep sell off with two different wave counts. The left side graph sees the sell off as a completed five wave move with a good sized rebound likely. The right side graph sees the low as a third extended wave with an upward wave 4 in progress that will be followed by one more painful sell off. On the lower left is a graph of the daily closing price of gold in NY and a simple RSI oscillator. Gold is in the same place that other markets are. You don't dare sell it short because it is already oversold, but if the war continues and other countries need cash, you know that tons of gold could hit the London market while you are sleeping and you wake up to find the price $500 lower. The bottom right side chart shows the top and sell off. Bulls are hoping that it is a simple zig-zag type correction with each down leg approximately the same length as shown by the red dashed lines.
Silver lost nearly half its value in the first plunge. The upper right chart shows the daily closing price in NY and a simple RSI momentum oscillator. It is at levels where silver usually rallied in the past but with the war ongoing and cash needs increasing, who dares to buy?
Directly to the left is XAU, an index of gold and silver mining company shares and an RSI oscillator below. Mining shares just suffered a major whipe out In past cycles that saw something similar, prices were higher over the next year almost every time. Some of the previous extremes in the oscillator were followed by slightly lower lows in XAU over the next month before a good rebound.
Platinum and Palladium are following gold.
The Dollar Index continued to behave as the red lines suggested, moving back and forth in a wave 4 consolidation before a final up move. Chart perfection requires more sideways action as we go into April. Bitcoin is worth watching because it is due for a cycle low later this year. The sideways action looks more like a correction in a down market than the beginning of another rally phase. I would like to see it trace out a contracting triangle which would set the stage for a final thrust lower.
Two weeks ago, chart patterns were suggestive of a bounce but the news was all bad. Do you trust charts, cycles and technical indicators or do you watch the obviously bad headlines? We got a bit of both. On Monday the 16th stocks hit a low then rallied a thousand points into Tuesday before selling off into another Monday low on the 23rd. The right side graph starts with this low and ends with Friday's session. It is possible that during the week, the Dow Jones Industrials traced out a contracting triangle with an ending thrust down into Friday's close. No one wanted to be long after a week of bad news and more to come over the weekend. On the left is a weekly chart of the Dow Jones Industrials with a simple RSI momentum oscillator below. The last two good buying opportunities had oscillator readings at current levels. As noted above, these markets are impossible to play because of the technical indicators on one side and the fundamental news on the other. Any hint of good news will result in huge rallies but buying into a collapsing world economy is equally bad.
The tech sector continued to get hammered as hedge funds raised cash. Nvidia's price earnings ratio is down to 34.2. There is a worldwide shortage of memory chips because of the data center build out. Memory chip companies were the last place to hide until Google's announcement. It will be a while before these chips are available and deployed so there will likely be a rebound in the chip space. If stocks ever stabilize, the blood bath in tech will make it one of the earliest winners during the rebound. With all the terrible news, I cherry picked charts to find a positive spin on something. On the right is a graph of the S&P 500 with letters labeling all the action since last fall as an expanding triangle pattern (a,b,c,d,e). Most triangles are the contracting type with each subsequent leg shorter than the previous. Expanding triangles are the opposite and are followed by very robust rallies into a final high then a major reversal. I took philosophy and religion courses in college and the important thing I learned is that a clever person can paint a very convincing word picture of events with internal consistency that leads you to believe that right is wrong, criminals are the real victims, your house is on stolen land and the S&P will bottom on Monday then rally to new highs. If the clever person uses proper diction with a lot of words ending in "tion" and "cion" it helps their case and if they are good looking they will always find an audience.
If there is any deescalation, here are two things I am watching. On the left is a graph of Russell 2000 futures. The Russell 2000 is made up of smaller companies. Theoretically, if the world is going into an oil crisis recession, these smaller firms should suffer more than big companies so you would want to avoid them. Our government is on a war footing spending binge in the industrial sector which is helping smaller firms. Also, the "liquidate everything" mentality of hedge funds hurt large companies more than small because that is what they owned. If the news turns positive, the Russell 2000 could shine. On the right is Apple. Due to the selloff, its price earning's ratio is down to 32.34, not bad for a great tech company. It sold off less last week than the major averages. Analysts criticized Apple for not pouring billions of Dollars into its own data centers. Now, most of those data centers look like they will be technologically obsolete within a year or two for reasons stated above and in previous updates. The big AI companies will all be desperate for customers and willing to discount their services to attract the I Phone business. Apple will get the benefits of the technology while not breaking its balance sheet to provide it. Costs incurred will be passed along to its giant customer base. If the world is not destroyed over the next few months, Apple could emerge a big winner.
Natural Gas is used to make fertilizer. With Qatar out of business for now, there is a shortage of LNG. Some of the countries that are blockaded also make fertilizer so supplies are limited as we approach planting season in the Northern Hemisphere. Russia is also a supplier and it is likely that sanctions will be removed from their fertilizer. The soils in major agricultural belts are depleted and need fertilizer every year. Investment advisors are telling clients to buy fertilizer companies in N America, crop ETFs and companies in the food supply chain. You can see from the graph of C F Industries and Archer Daniels Midland that the move into this sector has begun. On the upper right is CVR Energy. Aside from two oil refineries and pipelines, they own two nitric acid plants in N. America. Nitric acid is used to make fertilizer. When the gold rally started, I warned that before it was over, anything that could be called precious would join it. Eventually, silver, platinum and palladium rose. If there is no peace and the Straits stay closed, everything going into crops will also catch a bid. With CVR you get it's added exposure to energy. As with everything else that is benefiting from the war, rumors of a deal and a reopening of the Straits will result in a selloff.
On the left is the latest position of the yield curve on U. S. Government debt. The orange line is the latest. Rates on 20 and 30 year bonds rose above the January 2025 levels. Rates on short dated paper climbed when traders gave up on the Fed lowering rates in a 3% to 4% inflation environment driven by war spending and shortages. As with everything else, talk of peace will result in an immediate reversal. Bonds will soar. On the right is a graph of IEF, an ETF that tracks 7 to 10 year Treasury Notes. One could make the case that it is tracing out a contracting triangle where we are close to the "d" point. The next major move would be a quick, news inspired rally back to "e" before a plunge ( sudden spike in interest rates). IEF would make a significant low (high in rates) and reverse direction. Over the last few years, corporate bonds did better than government bonds. Currently there is a lot of worry about Private Credit. Even though it is Private, many of the funds invested in it also leverage their bets by borrowing from banks and Wall Street institutions. You could see a temporary return to Government Bonds.
Best Guesses -
If you can tell me what is going to happen in the war with Iran, I can give you scenarios for what happens in the markets. As of Saturday, when I am writing this update, it seems like there is no end to the war.
Stocks - Everything is extremely oversold with traders anticipating the worst. Good news will result in some big up days. If the war gets worse, investors will diversify out of pure energy plays into anything that is likely to be in short supply in the future, especially crop related things such as grains, fertilizer and materials that go into the fertilizer chain.
Bonds - The triangle pattern looks convincing. We had three bad bond auctions last week. The two year was the worse followed by poor 5 and 7 year auctions. The bid to cover ratio was lower than usual and bidders demanded higher rates for supporting our debt market. When money has to go toward gasoline, diesel and natural gas there is less available for investing in fixed income.
Dollar - We are in the fourth wave of the rally which should be a sideways trading range. I don't think it is finished.
Gold and Silver - The metals are very oversold. Based on the charts alone, I think there could be one more brief sell off by mid April then a rally. Gold is a store of value and you buy it for a future emergency. That emergency is now for Middle East oil exporters whose revenues are cut off.
Commodities - Commodities are mixed with some doing well because of possible shortages and others selling off because of the probability of a world-wide recession caused by a shortage of oil and natural gas. I have been a fan of grains for a while and will continue to hold even if there is a let up in the war.
Oil - This morning there is word that the Houthis launched missiles against Israel. Saudi Arabia is routing millions of barrels of oil per day through a port on the Red Sea. If the Houthis decide to close it down, oil will go higher. Reports are that the Saudis are paying them to stop the attacks on ships transiting the Red Sea. Will Iran pay them more to close the Red Sea? Oil is moving minute by minute on war news. The price of gasoline at the pump in the U.S. and its effect on political polls might be the determining factor in winding down the attacks.
Best of luck,
DBE