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Here's The Meaning of Yet Another Widening Range 7/30/21

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Here we go again. Another false breakout. Another plunge to the bottom of the range. We've seen this act before. It has all the earmarks of another developing megaphone pattern. Back in the old days, we called these patterns "broadening tops" because they invariably broke down into significant declines. 

Not any more. Megaphone patterns have become ubiquitous as the market trades in widening ranges. Like all patterns today, megaphones have the same meaning. We're going up. In modern technical analysis, if it's a pattern, it's bullish. 

Once the dealers are done shaking the trees, covering their shorts and picking up some long inventory for the next leg up. Sure those legs are getting shorter. Progress is slowing, reversal warnings are piling up. 

So what. 

It has been that way before in the past dozen years, and we've had only a couple of big breaks, including that one mammoth one of February-March 2020, of blessed memory.  

Here in this thread, we're only interested in the day to day. I cover the big picture outlook at Liquidity Trader's Technical Trader, which you can follow risk free for 90 days if you are a new subscriber. 

As for today, the overnight lows cracked the last couple intraday lows--they gotta make it look good-- but now have made a loop de loop and look headed back up.  The 5 day and 2-3 day cycle projections are unmet at 4365, but hourly cycle indicators have curled upward.

I don't know if they'll dip to 4365 or not, but if they do, and the hourly oscillators are at higher levels than the early overnight low, I'd bet on a minor low at that point. By the same token, if they don't pull back over the next few hours, and instead break 4404, then they'll probably retest yesterday's high. I see no reason to forecast a breakout from this week's range, either way. 

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Meanwhile, big picture stuff. 

Prices Show Us Not to Argue with Mother Market

Be Careful of that Yellow Stuff

Chart Picks – Dipping Two Toes in the Meat Grinder

How the Fed and Treasury Rig The Debt Ceiling Roulette Game Matters

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 Here's a freebie on my reaction to what the Fed did this week. 

Fed Finally Starts the Standing Rippo Farcility

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ETF Suggestion of the Day

Once apon a time I suggested an ETF stuffed with stocks the various arms of the US government was persecuting.

On the basis htat they would recover when the persecution stopped.

Hence the idea of the Tom and Jerry ETF was born.

Well this idea can now be extended to China.

How about the

Whinnie the Pooh ETF

Based on the same principles!!!!!!!!!!!!!!!

Indeed DIsney could probably get into the ETF business.

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I see the Fed is going to open the repo window to others besides the PD's. 

" Counterparties for this facility will include primary dealers and will be expanded over time to include additional depository institutions."

Is that new? I doubt it's significant unless hedge funds and Blackrock will be deemed depository institutions.

 

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14 minutes ago, Jorma said:

I see the Fed is going to open the repo window to others besides the PD's. 

" Counterparties for this facility will include primary dealers and will be expanded over time to include additional depository institutions."

Is that new? I doubt it's significant unless hedge funds and Blackrock will be deemed depository institutions.

 

Talking about it is not significant. Doing it is something else altogether. Then we'll talk. We'll have to see who takes it, and what they do with it.  Until then, only the dealers matter. 

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The Chinese market had a bad week Japan and HK too.  An X factor to keep in the back of ones mind. They beauty of Friday is by the afternoon  all that can be forgotten as everywhere else is closed. 

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4 minutes ago, Jorma said:

The Chinese market had a bad week Japan and HK too.  An X factor to keep in the back of ones mind. They beauty of Friday is by the afternoon  all that can be forgotten as everywhere else is closed. 

Irrelevant an immaterial. 

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1 hour ago, potatohead said:

Fed's BULLARD: FEELS FED SHOULD TAPER ASSET PURCHASES THIS FALL AND GO "FAIRLY RAPIDLY," FINANCIAL MARKETS ARE WELL PREPARED FOR IT

Not sure about the market, but I am sure Lee's subscribers will be prepared.....😉

We hope. 😀

But I don't believe Bullard is correct. Unless they want to see the 10 year at 3% "fairly rapidly."

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