Summary
Phil Anderson uses three sector charts — homebuilders (ITB), semiconductors (SMH), and copper — as cycle-position indicators amid rising trade-war volatility in early March 2025. He notes that the Dow’s forecast curve called for an early March peak, which arrived slightly early in mid-February, and instructs subscribers to watch Gann dates of March 15 and the March 21 equinox for potential turns. The email counsels patience and “sit-out power” while stops are monitored and no clear set-ups have triggered.
Key Claims
- The average US tariff rate is now the highest since the early 1940s following 25% tariffs on Canada/Mexico and a cumulative 20% tariff on China — confidence: high
- The forecast curve called for a rally to start 2025 followed by an early March peak; the Dow peaked mid-February, slightly ahead of schedule — confidence: high
- Homebuilders (ITB) peaked in October 2024 and are in a possible downtrend; a break below $95 would confirm a lower low and signal the cycle is in final stages — confidence: medium
- Semiconductors (SMH) peaked in July 2024; a break below $210 would confirm a primary downtrend — confidence: medium
- Copper is forming a Mexican Pete (ascending triangle) pattern; a breakout above $5/lb could signal the cycle-end surge described in The Secret Life of Real Estate and Banking (p. 369) — confidence: medium
- In the last cycle, homebuilders and banks peaked months to years ahead of the S&P 500’s ultimate high; the same leading-indicator logic is expected to apply to homebuilders and semiconductors this cycle — confidence: medium
- A stock market rebound is anticipated once bearish sentiment peaks during this patch of weakness — confidence: medium
- West African Resources (ASX: WAF) broke out to all-time highs on news; the email cautions against buying news-driven breakouts (lesson cut off in source) — confidence: high
Mex Pete References
- Copper (generic commodity, not a ticker): Weekly copper chart described as “setting up in our Mexican Pete pattern.” Breakout level cited as $5 per pound. A confirmed break above that level is flagged as the potential start of a cycle-end surge, consistent with analysis on page 369 of The Secret Life of Real Estate and Banking.
Stock Picks / Signals
- ITB (iShares US Home Construction ETF): Watch level — break below $95 would be a lower low and a concerning development requiring confirmation of a lower top. No explicit buy/sell signal issued.
- SMH (VanEck Semiconductor ETF): Watch level — break below $210 would indicate a primary downtrend may be in place. No explicit buy/sell signal issued.
- Copper: Breakout watch above $5/lb for Mexican Pete breakout signal. No explicit buy/sell signal issued.
- WAF (West African Resources, ASX): Noted as breaking out to all-time highs on news. Implicit signal: do not buy news-driven breakouts. Was under consideration for the watchlist but not added.
Predictions / Forecasts
- Dow Jones Industrial Average: Patch of weakness expected to continue short-term, followed by a rebound when bearish sentiment is at its peak.
- Gann turn dates: March 15 and ~March 21 (equinox) flagged as potential inflection points; equinox/solstice dates noted as more important in volatile periods.
- Copper: Break above $5/lb forecast to trigger a cycle-end price surge analogous to prior late-cycle copper spikes.
- Real estate cycle: If ITB confirms a downtrend (lower low + lower top), the cycle is interpreted as being in its final stages.
Notable Quotes
“Stock prices discount future business conditions. And understanding how certain sectors behave at points in the real estate cycle can be like having a crystal ball.”
“Just when everyone grows bearish and thinks that stocks can do nothing but go lower and all the news is negative…we’ll see a rebound.”