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Rebound Too Little Too Late, But Farter to Go 9/22/20

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It took all day, but they finally mounted a short covering stampede in yesterday's last hour.  The result left the market shy of repairing the breakdown. The indicators are ambiguous this morning. They're not signaling yet whether there's a second round to the rebound, or the decline has farter to go.  Stay tuned. 

60 minute bars. 

tvc_701f25ea6c705d06738c43e5fe276daf.png

 

30 minute bars
tvc_6ad624c2292546980179210c678bab9c.png

 

On the daily chart, you can see clearly now where support stopped the decline. The daily indicators are declining, and are in a kind of no man's land where they are not at levels of any prior lows. I infer from that that there may just be a "tad" more downside. 

tvc_fa2a776fb6b6b430d5a3e679c27688b2.png

 

Catch up with the longer term outlook and chart picks for playing both sides of the game in my weekly Technical Trader reports. 

An important low is due right now but bears have a chance to break the market. This report shows you the setup and gives you picks to play both ways. Current long/short swing trade chart picks are up 6.9% (100% cash basis) on average, with an average holding period of 3 weeks. This week I added 3 short and 3 long picks. That leaves the list with 6 shorts and 10 longs.

Technical Trader subscribers, click here to download the report.

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Composite liquidity continues to rise, but at a slower pace than in the second quarter as the Fed has slowed QE. That reduces the cash flowing into Primary Dealer accounts, which in turn contributes to a slowing in secondary liquidity drivers.

“Slowing” is a relative word, however. Historically, the numbers remain gargantuan.

No, something else is holding the market back. Here’s what that something is, and what we’re going to do about it.

Subscribers, click here to download the report

Not a subscriber yet?

Get this report and access to all past and future reports risk free for 90 days! 

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17 minutes ago, DrStool said:

5 day cycle projection 3320-25

 

tvc_e047b3e1a5ef539b91943cae714b896c.png

I have to say, every time I see this chart, it is like the Picasso of charting. Complete madness at first glance to the novice, then looking at it for several minutes, one discovers absolute beauty...........

Pablo Picasso 1881–1973 | Tate

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Whoa. Bearish.

Dear Client,

As you’ve likely observed, elevated option implied volatilities indicate that the markets will be confronting elevated volatility both before and after the November 2020 election. IBKR shares that sentiment and believe it’s appropriate to start controlling leverage in a measured fashion in advance.

Consequently, to protect IBKR and its customers, IBKR will increase margin requirements by as much as 35% above normal margin requirements leading up to the November U.S. election. To illustrate, consider a Reg. T margin account with stock XYZ having an Initial Margin requirement of 50% and a Maintenance Margin requirement of 25%. With the increase fully implemented, the new requirements would be 67.5% Initial and 33.75% Maintenance. Accounts subject to risk based margin will have their scanning ranges increased in a similar manner.

This will be implemented gradually each day, increasing Initial margin requirements from normal levels starting September 28th to a rate that will be 35% higher by October 23rd. Maintenance margin requirements will increase in a similar manner between October 5th and October 30th. The new requirements will be implemented each day, after the market closes in New York, and will be effective the next trading day.

IBKR may make additional changes to the margin on certain products, or all products, depending on volatility. This includes changes built into the standard margin model as well as any new house margin requirements that may be imposed.

Interactive Brokers Client Services

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