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This Is the Top 3/16/22

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This is not the end of the top. Nor is it the beginning of the top. But it is the beginning of the beginning of the top. We know that because on the hourly chart of the ES, S&P 500 futures, the hourly cycle indicators for the 5 day cycle are at peak levels where tops normally begin. 

Ah, but there's a little fly in the ointment. The 5 day cycle projection is 4340. Currently as of 5 AM in New York, they're chewing through resistance at 4300-4310. If they clear that, a pop to 4340 would be an easy move. At that point they would run into multiple resistance lines 4340-50, which should end the move. 

Assuming that they get through here. 

Oh. One more thing. 

If they clear 4350, the conventional measured move target would be 4550. 

Fuggeddabout dat.  

Thank you. 

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For the big picture. 

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6 hours ago, Jimbo said:

LME VIX ET AL......

The house makes the rules.

When you make the rules.

Losing is optional.

Heads I win....tails I cancel the trades....

Of course no one will play with you in the end.

The LME has significantly impaired its franchise.

A lot of commodity futures markets will get less liquid and more volatile because of the higher margin requirements.

Not to mention, higher margin requirements are margin calls. There will be selling. 

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Yardi Matrix says February national average multifamily rent inflation was 15.3% y/y 0.6% m/m .

These are based on market rent. This is the real inflation, not the BS the BLS uses for housing. 

As you know from listening to me whine about it for 20 years, the BLS doesn't count actual home prices. It would cost the government, and its corporate cronies, too much if it did. 

It doesn't count actual market rents. 

It uses something called Owner's Equivalent Rent, which is based on a yearly tenant rent survey, then adjusted monthly by what owners think their homes would rent for. As if they knew. 

But the annual survey asks tenants how much rent they are paying. That means contract rents. Contract rents are always lower than market rent and move up more slowly. That's because landlords factor in the frictional costs of tenant turnover. They would rather keep an existing tenant in place than incur vacancy, and the costs to refresh the unit for the next tenant. So they discount contract rent increases to keep existing tenants in place. 

This has nothing to do with the actual cost of rent in the market. Just like substituting hamburger for steak when prices are rising. It doesn't tell us what inflation actually is. It constructs CPI specifically to minimize the increases in labor contracts, and government contracts, salaries, and benefits, such as to social security recipients. That's why they took actual housing costs out in 1982. That's why they use hedonic adjustments, substituting cheaper shit in the index when prices of more expensive stuff is rising too fast. 

I think that the national rent index of inflation at 15.3% is a pretty good measure of annual inflation. The 0.6% figure for February isn't seasonally adjusted. March-June increases are likely to soar from there.  Meanwhile the contract rent data that the BLS uses to suppress the CPI will come back to fart in their face, when rent inflation cools, because it will lag that cooling trend. 

Stay tuned, inflation fans. The game is only in the middle innings. 

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4 hours ago, DrStool said:

The 5 day cycle projection is 4340. Currently as of 5 AM in New York, they're chewing through resistance at 4300-4310. If they clear that, a pop to 4340 would be an easy move. At that point they would run into multiple resistance lines 4340-50, which should end the move. 

Closing in. 

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8 minutes ago, DrStool said:

Right here. 

Need to break 4312 this hour to confirm. Otherwise, 4340 here we come. 

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Full confirmation of new high on hourly indicators. So they'll pullback now. Rally into the dog and pony. Make a double top with negative divergences and then turn lower after Powell says some kind of jackassery. 

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Isn't the Rule always to fade the initial move?

I mean, that's sort of what I remember vaguely from the dialogue here when the Fed was raising rates sometime back in ancient history.

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