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Excess Liquidity in April Wins Every Time 4/1/22

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$74 billion in T-bill paydowns so far in April have been enough to cover net new Treasury coupon issuance with $40 billion left over for other games. It hasn't helped the bond market. Treasuries continue to be liquidated, and short term T-bill rates continue to soar despite the excess cash flooding the market over the past couple of weeks. So what happens to a bit of that excess cash at the margin? The them buy stonks. It starts with targeted raids on the shorts and bleeds out into the broader market. 

There's no surprise here. It happens every April, and I laid out the likely scenario for you over and over for the past month or more.

In fact, even the technical indicators warned us to be prepared for a rally. So this, again, is no surprise. Up, up and away this week on the ES S&P 24 hour futures toward a 5 day cycle projection of 4510, and a conventional measured move target of 4560-70. That's based on the breakout from the rounded bottom base that formed over the previous six days. 

To get to that target, the market will need to chew through a thick layer of resistance in the 4510-25 area. I wouldn't get too excited if it rolls over below that. There's still a lot more cash coming over the rest of this month. The market would need to break trend sport, which will be around 4470 as New York trading opens, to have any hope of creating a downside reversal that amounts to anything. 

I don't see that happening today.



The big picture:

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Doc I was going to mention you might want to correct the date on your thread, but after viewing my charts this morning...it feels like April 1st again.  I only hope that I'm not being played the fool here...at least in the DJI. 

If you'll recall...I was watching 35,200.  Still watching...

To get down to business.  I'm not seeing anything out of the ordinary and unexpected here.


In the SPX, they gave us that 1st hundred points quickly...I'd imagine a retest isn't out of the realm of reasonable imagination?

Sometimes...to go forward, we must first go back...

Perhaps I'll stick to the DJI for a minute though AND for that, we'll actually need to discuss the Nasdaq. If you'll recall back on March 28th I mentioned the Nasdaq is trading "one step ahead of the DJI/SPX complex".  Here is the chart I posted at that time.

The Nasdaq is on the left...the DJI's topping pattern on the right.  In this chart, please notice in the Nasdaq we're just finishing up the secondary W formation that led to the next chart...


This is the "Now, this is ART" chart from March 30th introducing compression and showing the completion of the secondary 'W' within the pattern.  Why mention this?  The next chart will begin to answer two questions.  1) Why mention this at all? and 2) What does this have to do with the current DJI?


I'll say it again...The Nasdaq is trading one step ahead of the DJI.  Can you see it now?


I've updated several other charts and will be posting them throughout the day.

Best Regards,

The CoinGuy

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4 hours ago, DrStool said:

Up, up and away this week on the ES S&P 24 hour futures toward a 5 day cycle projection of 4510

5 day cycle projection now 4530.  

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I'd like to see 4510 hold...

I'm going to start off with BTC.  We had the probe into the northern regions above 45k where BTC was slapped back down to the lower trendline.  It's having a hard time climbing up and off.  Possibly because it's getting ready to drop like a rock?  That is my call.

Here is the original chart I posted on March 24, 2022.


Here is the updated chart concentrating on the January 23, 2022 low to the present.  Could it spike to the upside?  These bubblemania issues have serious emotional swings so...yes it can do anything, but as far as I'm concerned it's going to hold to the traditions of the current pattern.  I don't care how distorted the pattern becomes.  It will succumb.


As I've previously mentioned...I firmly believe BTC is nothing more than PYPL in disguise.


It could also be said...PYPL(NFLX et al.) is leading the WHOLE market.

Where is PayPal trading?  Have you looked lately?

Best Regards,

The CoinGuy




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Now...if we can just get back to 35200. 

Again, the teacher in me will remind you...the DJI likes to trade on the 2's and the 8's.  No one over the last 30 years has ever asked me why this is the case.  I couldn't give you an answer publicly...I'll just say...the White Shoe Boys ARE in charge(Although, private inquiries by old friends are always given top priority.).  Smile.

Remember in the days of old when you'd have markets that traditionally traveled in opposite directions from each other...traveling in the same direction "for a time" although each swing still appeared - in opposition.  I'm seeing those shenanigans starting up again.  Just watch the HUI/DJI relationship closely(from here) and you'll see what I'm talking about.

Let's talk about the ^HUI.  It's getting pounded at the moment.

I won't repeat 325 yet again.  I think when it comes to the ^HUI, I've already said all there is to say unless we see something strange from here(and yes...I'm prepared for strange too.).  I'm personally just watching the 235 area and that will tell me what the future holds.  I don't care about anything else at the moment. 

If/when 235 falls...it gets ugly.

I think what is confusing people in regards to gold and silver is...they weren't looking for such a long term pause in the market.  I am saying this...because gentlemen....please believe me when I say, I expect a much longer pause in the Broad Markets.  This isn't 2000 or 2008.  A quick one and done.  No...this is generational in nature. 

From my perspective...you will not be setting up the primary decline(3rd Wave) in the broad markets measured in YEARS, not months from right here. 

If you slow down your rhythm...you won't be bucked off.  That is my best advice I can offer at this time.  Slow and steady will win this race.  Most...will simply not make it.  I am pointing my finger right at the Robinhood types trading memes and Cryptos.  It's not investing, it's not trading...it's an addiction.

That is my perspective.


Ok...I apologize for going off on a tangent, but my whole life is lived on a whim...smile.

Where were we?  The ^HUI.

Here is the updated patterned behavior chart.  I already posted this, but updated it to reflect the current weekly chart.

I've been following this pattern for 5 years now.  We're starting to see some departure, but when combined with 5 other forms of technical analysis and my own homebrewed cocktail across three generations, let me assure you...it will stand the test of time until my original 2011 call is touched.


Here is the original chart I posted on the ^HUI from March 14, 2022.


I'll also add the original GLD chart, although nothing has changed here either.  When the decline gets rolling, I'll start giving targets.

Heaven or Hell...1641040166_HeavenorHell.thumb.jpg.e4be752a6c98b43c9e081c14d9a0498f.jpg

For any budding patterned behavioral chartists...I'll add this chart for your perusal.  Can you see it?  If you can...you know my thoughts going forward over the next year.

The left is the pattern that developed in the Hui from Pi Day 2008 to July 15th.  The right...the current weekly chart of the ^HUI.

Please note...July 15th in the ^HUI ran into trouble right at 470.  What is 1/2 of 470?  See above!

You can't trade it...if you can't see it.  When you're putting on a trade...long or short.  If you're guessing, you lose.  I'm NOT in the business of guessing.1058450221_HooeyPhooey-April122022.thumb.jpg.e7c56c4e51c80eb026ebf94ae01b56c4.jpg

I sure hope the ^HUI doesn't have a weak chin.


Best Regards,

The CoinGuy


Why was the high in the ^HUI on 4.18?  Any thoughts?  Going forward...I will be commenting on this very thing. 

I'll give you the answer now.

May 31.


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It's all in the timing?

If we don't crack here...the pattern was stretched to the breaking point...what happens next would have to be a reversal of the "energy signature".  I just don't see that happening.

Ah...there's my old friend.



Could always be wrong, but I'd like to see the news that accompanies the rally that ensues.

Cancer cure?  Cold fusion?




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