Jump to content

When the Up Phase in Stocks is Flat, Look Out Below 4/19/22

Rate this topic


Recommended Posts

A 3 day cycle up phase has now been flat on the ES S&P 24 hour futures hourly chart for more than a day. Flat up phases imply sharp down phases. Of course, they don't always work out that way. Sometimes the subsequent down phase just continues sideways in a dead zone until there's some impetus. 

We expect liquidity impetus this week as tax receipts drive T-bill paydowns. While most of it flows into money market funds, it does force some cash into the pockets of some dealers and other equity investors who had held the expiring bills. Whatever it is, at the margin, it's usually enough for a seasonal rally in stocks. 

Of course, I can't remember the last time this happened in a draconian Fed tightening cycle, and I'm pretty old. So let's just honor the charts.  The rules still rule. Rule One, Don't fight the Fed. Rule Two, The trend is your friend. AKA Don't fight the tape. 

Right now, the tape looks like caca. 

tvc_be6834beaee22e5f3342383dacb8be2b.png 

Meanwhile, here's a wildly bullish chart. That is until you look at the ticker and see that it's the chart of the 10 year yield. 

tvc_1ef9978408bb477dc41859e163c6db5b.png

Therefore, it's the inverse of price. The weekly chart of the TLT, 20 year Treasury bond ETF gives you some perspective. 

tvc_a7fe3e407623fcc886ce8941967f8383.png

 Sell Gold in May and Go Away?

 

The big picture:

If you are a new visitor to the Stool, please register and join in! To post your observations and charts, and snide, but good-natured, comments, click here to register. Be sure to respond to the confirmation email which is sent instantly. If not in your inbox, check your spam filter. 

Link to comment
Share on other sites

  • Replies 26
  • Created
  • Last Reply

Top Posters In This Topic

Top Posters In This Topic

For pattern recognition purposes one should note that with a descending line the right side is no longer necessarily the head end but rather could be the tail end of the animal, bronto or whatever.  Of course here, more than any other place, we are familiar with with what happens at the tail end. Currently I am not seeing a pattern but my pattern recognition skills are weak. I'll leave that up to the artists and masters.

Then too, how quickly the Carl Malden pattern has been forgotten.

 

tvc_be6834beaee22e5f3342383dacb8be2b.webp

Link to comment
Share on other sites

53 minutes ago, Jorma said:

For pattern recognition purposes one should note that with a descending line the right side is no longer necessarily the head end but rather could be the tail end of the animal, bronto or whatever. 

Brilliant! 😁

Link to comment
Share on other sites

4460 is now the number to watch. If they take that out, it would measure to 4560. If they roll over below that, then they'll take a dump right back to 4360, like explosive diarrhea. 

tvc_8db8a7856593577ecac02ffb0bed1d75.png

Link to comment
Share on other sites

If anything, the market is weaker than it should be given the liquidity and technical tailwinds this month. 

It bodes ill. 

Link to comment
Share on other sites

1 hour ago, DrStool said:

4460 is now the number to watch. If they take that out, it would measure to 4560. If they roll over below that, then they'll take a dump right back to 4360, like explosive diarrhea. 

tvc_8db8a7856593577ecac02ffb0bed1d75.png

Still valid. 

Link to comment
Share on other sites

Guest
This topic is now closed to further replies.
 Share

  • Tell a friend

    Love Stool Pigeons Wire Message Board? Tell a friend!
  • Recently Browsing   0 members

    • No registered users viewing this page.
  • ×
    • Create New...