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US Stocks Wake Up to Take a Wee Hours Dump 7/5/22

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 Europe rallied on Monday, and sold off hard overnight and this morning. The ES US S&P 500 continuous 24 hour futures mimicked that move. As of 5 AM in New York, they've managed to hang on to an uptrend by a hair. But they're on the cusp of a sell signal. They need to be below 3800 at 10 AM ET, for the uptrend to be broken. 

Even if that happens, it looks bumpy below, with additional sport lines around 3785, 3770, and 3765, any or all of which could be the bases for bounces.  

If they manage to maintain the uptrend, it probably won't be straight up, either, with multiple resistance lines between 3820 and 3860. 

Overall, the indecision range looks like 3765 to 3860. Between those lines is random positioning. But breaking one or the other should lead to a nice move. Looking at the hourly oscillators at 5 AM, the most likely move is down. 

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Meanwhile a few post holiday deep thoughts. 

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Meanwhile, the euro has broken down against the doolah, and is now indeed targeting parity on the daily chart. 

ygqy8

However, when you look at the very long term view, calculating conventional measured move targets from the broken top and consolidation patterns, results in a target range of 0.75-0.80. 

Ultimately, it depends on the relative tightness of the Fed vs. the ECB. As long as the Fed is tighter than the ECB, the euro will weaken against the dollar. 

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In other meanwhiles, BTC continues to consolidate around 20k, on its way to its long term measured move target of 5000 below zero. Here's an arithmetic scale chart. 

ygr1c

On the daily chart, it's not so bad. The one year cycle projection is now 13k. It's trying to mount another rally. It needs to clear 21k. If it does, it should run to 23k. If it doesn't, breakdown dead ahead. 

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Finally, I want to put that rally in the bond market in perspective. Here's the 10 year yield with the gigantic drop from mid June, on a daily chart. 

ygr3w

 

Here's a monthly chart for the long term perspective. 

ygr4c

I'm not too impressed with the bond rally. 

Liquidity wise, June was as good as it gets, and as good as its gonna be.   

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United States Steel Corp $X P/E of 1 and Price to book of 0.4. Some of the valuations are getting insane. Are earning going to go to zero or the next ten years? Liquidity appears to be really drying up already and we haven't even hit full Q/T yet.

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14 minutes ago, sandy beach said:

United States Steel Corp $X P/E of 1 and Price to book of 0.4. Some of the valuations are getting insane. Are earning going to go to zero or the next ten years? Liquidity appears to be really drying up already and we haven't even hit full Q/T yet.

Valuation is an utterly meaningless concept. Stocks only have intrinsic value to those who own controlling interest, or who otherwise control (C-suite). Everybody else owns only the right to sell. The price is the value. 

 

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29 minutes ago, DrStool said:

Valuation is an utterly meaningless concept. Stocks only have intrinsic value to those who own controlling interest, or who otherwise control (C-suite). Everybody else owns only the right to sell. The price is the value. 

 

Awesome explanation Doc 😎

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and another Protected Day.......

Yields lower, "growth" "spec" assets higher............ recession, who gives a F..... its all good.......

 

>: and another Daily Tail for the fraudex charts

>:: and back to 3820 with another miracle of "Free Markets"

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