DrStool Posted July 20, 2022 Report Share Posted July 20, 2022 The bear market is over.* In modern markets, the S&P 500 has never lost ground over the following year when advancing volume was 87% or more of total volume for 2 out of 3 days coming off a 52-week low. It has a perfect track record. ** pic.twitter.com/1p6moIqrX5 — Jason Goepfert (@jasongoepfert) July 19, 2022 I don't know. The Fed is still tight. At all those other bottoms the Fed had turned to easing. Rule Number One. Don't fight the Fed. Do I respect technical data? Yes. Is there a first time for everything. Uh... yeah. I'll call it based on the analytical tools I used. I've been calling short to intermediate bottom for weeks. That's as far as the current data will allow me to go. The Fed, and current inflation readings, have told us that more tightening is ahead. More tightening ahead. Don't fight the Fed. More tightening ahead. Don't fight the Fed. So, last night the 24 hour ES S&P futures hit the 5 day cycle projection of 3950. It was a done deal once they cleared resistance at 3905. Last night the futures also hit a 2-3 day cycle projection of 3963. This move is done. It's time for consolidation. But the high base breakout conventional measured move target is still 4075. I'm not holding my breath that it will happen today. At 4:15 AM sport lines on the hourly chart show up at 3936 and 3928. If they hold above that this morning, they'll try the upside again. Whether it extends or not will depend on the battle of newly established resistance at 3961. Stay tuned for all that. To better understand the big picture right now so that you can take the correct action when the time is right, check out the following: Catch a Falling Knife July 19, 2022 Survive the Meat Grinder and Market Will Gladly Pay Us Back on Tuesday July 18, 2022 Major Swing Cycles Align for an Up Phase July 18, 2022 As Good As it Gets, Before the End of Time July 18, 2022 Are the Fed and Treasury Geniuses, or Just Lucky? Part One July 12, 2022 Recession? What Recession? July 5, 2022 Stocks Are Even More “Dover Sole” Versus Liquidity June 28, 2022 We Knew QT Would Be Devastating, But You Ain’t Seen Nothing Yet June 21, 2022 If you're serious about the underlying forces of supply and demand that drive the markets, join me! 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 More sharing options...
DrStool Posted July 20, 2022 Author Report Share Posted July 20, 2022 BTC has broken out, in a move that measures to at least 25,500 and as much as 28,000. There's uptrend channel resistance at 24,400. If they break out of that, then it would have clearance to the first real resistance level around 26,600. It looks like a 6 month cycle upturn. The next downturn isn't due until December-January. 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! Link to comment Share on other sites More sharing options...
DrStool Posted July 20, 2022 Author Report Share Posted July 20, 2022 Real market short term interest rates are now up 92.5 bp since the Fed's last rate setting circus in June. If the Fed only goes 0.75 it will prove yet again that they are not serious people. The Fed is tight in terms of Q of M, and the market has shown it, but the Fed maintains this rate setting sideshow for some godforsaken reason that I can't fathom. History shows that inflation doesn't cool until rates are punitively positive. Right now they remain massively negative. Recession? What Recession? Link to comment Share on other sites More sharing options...
DrStool Posted July 20, 2022 Author Report Share Posted July 20, 2022 The behavior of the 10 year Treasury is showing the impact of As Good As it Gets, Before the End of Time. 3 more weeks until the sheet hits the fan. Link to comment Share on other sites More sharing options...
Jorma Posted July 20, 2022 Report Share Posted July 20, 2022 Nobody believes interest rates can whip inflation now, or at least nobody believes that punitive rates will ever be enacted by central banks again. So we are at the 'What Me Worry' stage in the market. Actually nobody believes interest rates can rise more than a few points in any possible case. It's an idea beyond most people conception. So as ever we await rates rising against central bank wishes and powerless to stop them. Or as the man said long long ago, nothing's changed until rates rise. Link to comment Share on other sites More sharing options...
DrStool Posted July 20, 2022 Author Report Share Posted July 20, 2022 The 13 week bill rate has gone from 0 to 2.5 The 1 year has gone from 0 to 3.15 The 10 year has gone from 0.5 to 3.5 before pulling back to 3.0. These are the largest, fastest rises in history. It has been a draconian tightening and it will get even worse as the Fed remains massively behind the curve. And the market goes tro lo lo. Link to comment Share on other sites More sharing options...
DrStool Posted July 20, 2022 Author Report Share Posted July 20, 2022 Pullback to sport. Here the rubber meets the road. Link to comment Share on other sites More sharing options...
DrStool Posted July 20, 2022 Author Report Share Posted July 20, 2022 2-3 day cycle projection 3975-76 Link to comment Share on other sites More sharing options...
DrStool Posted July 20, 2022 Author Report Share Posted July 20, 2022 Well, maybe 3970. Link to comment Share on other sites More sharing options...
Jorma Posted July 20, 2022 Report Share Posted July 20, 2022 7 hours ago, DrStool said: The 13 week bill rate has gone from 0 to 2.5 The 1 year has gone from 0 to 3.15 The 10 year has gone from 0.5 to 3.5 before pulling back to 3.0. These are the largest, fastest rises in history. It has been a draconian tightening and it will get even worse as the Fed remains massively behind the curve. And the market goes tro lo lo. The thing is those rates are a joke when measured against the inflation numbers. They are an incentive to borrow. Everyone knows the Fed is a joke and that's exactly how they want it. Until they don't. Link to comment Share on other sites More sharing options...
DrStool Posted July 20, 2022 Author Report Share Posted July 20, 2022 True. It's a joke. It's draconian, and still a joke. That's the situation they've put us in. Link to comment Share on other sites More sharing options...
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