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Here We Go! Failed Breakout and Early Morning Test 7/7/22

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It looked like a sure thing yesterday. The market was breaking out on its way to a conventional measured move target of 3960. But then it stopped, and fell back below the breakout line before New York closed yesterday. This morning, the 24 hour ES S&P fuguetures made another run at yesterday's high, but as of 5 AM New York time, they were having trouble, again. 

There are two numbers they need to beat to be on their way higher. 3865 and 3872. Clearing those would bring the trading algos piling on the long side. 

What about the other way. First things first, there's an uptrend channel line at 3855 in the 5-6 AM hour that needs to be broken. That line rises to 3865 in the opening half hour of regular trading. But even breaking that would only set up a trading range, with the low parameter at 3806. That would need to be broken to turn the pattern into a top for the next couple of days. Which is the only time frame we watch here at the Stool. For the longer term outlook and trading suggestions, click here and join the fun. https://liquiditytrader.com/index.php/category/technical-market-timing/

yhb57

 

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  • DrStool changed the title to Here We Go! Failed Breakout and Early Morning Test 7/7/22

My analysis of the bond market has been bearish since August 2020. I have repeatedly written that every rally was a gift, an opportunity to bondholders to GTFO. The recent rally has been no different than those which preceded it in that regard.

Yesterday it seems to have made the turn for the next upleg in yields.  The 10 year Treasury yield bounced hard off of its 100 day MA, after making a slightly higher low than the May low. 

yhbk4

Meanwhile the Fed is, as usual, massively behind the curve. Not just behind the inflation curve, but massively behind the curve in its ratification of market interest rates every 6 weeks.

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 yhbl4

The Fed worries about its inflation fighting credibility. It has no credibility. The evidence shows that consumers are already spending like there's no tomorrow, in their efforts to stay ahead of inflation. Unfortunately, they are right. There is no tomorrow. Might as well enjoy today and buy that air conditioner now, rather than waiting for that end of summer sale. 

Liquidity Trader- Money Trends

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Buttcoin continues to tease its fans, by hanging around 20,0000 while inexorably headed for its measured move target of 5000 below zero. 

yhboe

That's a weekly bar chart on an arithmetic scale. Cool, huh?

Now the daily chart is less dramatic, but even it points to 13,000 on the basis of a Hurst one year cycle projection. 

yhbp9

What might cause a change of outlook there? For starters a rally that broke through and sustained above 23,000. Failing that, this con is headed toward the black hole singularity. 

Technical Trader

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One is real data and the other is survey data. so unless there is some reasonable explanation for the surge in withholding tax collections that involves something other than hiring I would give more weight to that. 

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BTC 5 day cycle projection 21,500. Base breakout measured move target 22,000-22,500

yhelp

Liquidity Trader- Money Trends

How Fed and Treasury policy, Primary Dealers, real time Federal tax collections, foreign central banks, US banking system, and other factors that affect market liquidity, interact to drive the financial markets. Focus on trend direction of US bonds and stocks. Resulting market strategy and tactical ideas. 4-5 in depth reports each month. Click here to subscribe. 90 day risk free trial!

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ES 5 day cycle projection 3905. Base breakout measured move target 3975. 

yhemq

Technical Trader

Lee Adler’s proprietary cycle analysis with market trend and position ideas for investors and weekly individual stock swing trade ideas for traders. Click here to subscribe. 90 day risk free trial!

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10 Year Treasury Yield 5 day cycle projection 3.07. Measured move breakout target 3.17. 

yhenl

Liquidity Trader- Money Trends

How Fed and Treasury policy, Primary Dealers, real time Federal tax collections, foreign central banks, US banking system, and other factors that affect market liquidity, interact to drive the financial markets. Focus on trend direction of US bonds and stocks. Resulting market strategy and tactical ideas. 4-5 in depth reports each month. Click here to subscribe. 90 day risk free trial!

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Gold 5 day cycle projection 1734 done 

yhepn

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Goldman Sachs economist Spencer Hill:

We estimate nonfarm payrolls rose 250k in June ... employment surveys and Big Data employment indicators generally weakened in the month, and the Challenger report showed an increase in job cuts—particularly in real estate, autos, and media. ... We estimate an unchanged unemployment rate at 3.6%—in line with consensus—reflecting a solid rise in household employment offset by a 0.1pp rise in labor force participation to 62.4%.

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