DrStool

I'm a supply/demand purist. Whatever the excuses is for this stock buying, being it earnings, taxes, deregulation, the fact is that there's less liquidity in the system now than a year ago and there will be even less a year from now. The persistent march higher of money rates in the Treasury market is a barometer of this. This will begin to affect stocks at some point. Timing is the issue as always.

We're in a mania. They are borrowing hand over fist to finance it. It will end badly. But I've gotten it wrong to this point. The game has changed. Monetary policy transmission was direct to the market when the Fed was pumping it up. Going in reverse, the Fed's attempt to deflate the market is indirect. They're doing something they've never done before. I made my best estimate of the timing of the effects. I was too early. The transmission of negative policy effects is taking a lot longer than I thought it would.

Investors don't care that the US is headed for either authoritarian government, electoral chaos, or both. In any event, something frightening will happen politically before the elections. The Dow will probably rally 1000 points instantly.

Well despite the fact that they sawed off the limb I was out on, somebody has to be the voice of reason. Saw SPY calls as a hedge against something like this when it broke out above 2850. New benchmark to roll em up would be 2930.

The 10 year yield has double topped at 3.095 and is pulling back.

Next R line is 2930. Then the moon.

They're punching at the upper channel line.

5 day pulls back to 2933-35

3 day cycle projection 2928. Short term uptrend channel resistance 2925.

5 day cycle projection 2940.

Breakout 5 day cycle projection 2928. 2 day 2922.

We have a shot here. It should have launched by now.

If they can't launch from here, watch for 2905 to break. That would be a good sign for bears. 2903 better. Below 2900 and it could be off to the ski slope.

Tried and failed to break down. The pattern is very bullish at this point.