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DrStool

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  2. Good Game Management 1/17/25

    in The Daily Stool - Stock Market Message Board

    Posted

    It then added:

    My View on the Future:

    • Short-Term: Markets may continue to rise in the short term if inflation data supports a dovish Fed stance, but a correction is always possible, particularly if valuations stretch too far or a geopolitical event triggers risk-off sentiment.
    • Medium-Term: The market may face headwinds from slowing growth and lingering inflationary pressures, leading to more selective rallies in certain sectors like clean energy or AI.
    • Long-Term: The future holds promise for innovation-led growth. Companies and countries that adapt to changing technologies, demographics, and sustainability challenges are poised for success.

    The key to navigating the future lies in adaptability: monitoring macro conditions, maintaining a disciplined investment approach, and being prepared for both opportunities and risks. 

    Me: My reaction is that if you ask it generalities, it responds with generalized conventional wisdom bullshit. In that respect it is utterly useless. 

    But when you give it something specific and highly technical and ask it to analyze it, it does a really good job. Not perfect, it makes mistakes, at least in areas that I have deep expertise, but most of the analysis is really good. 

    I have even fed it some of my liquidity data and it has done a really good job of interpretation, analysis, and forward projection. 

    Most importantly, it can aggregate disparate data streams. The Fed and Treasury have historically presented key data that needs to be aggregated to be useful, in highly differentiated streams. It does that when it doesn't want the public to see the big picture. This is particularly true of Primary Dealer data. Navigating Market Risks: Insights from Primary Dealer Positions – January 2025

    I have taught it to update my most complicated charts, which would normally take me 5-6 hours to do manually. I have needed to simplify the instructions into small sets because the big picture is confusing it and I haven't yet found the perfect instruction. But I can now get the spreadsheet updated in 10 minutes. I expect to be able to instruct it to tabulate all of the data in one instruction soon. That will turn what had been an all day job into something that takes 30 seconds. 

  3. Good Game Management 1/17/25

    in The Daily Stool - Stock Market Message Board

    Posted

    Here's its Goldman answers about the market's future.

     

    When Will the Rally End?

    1. Fundamental Weakness Emerges:

      • Earnings Disappointments: If corporate earnings fall short of expectations, particularly in key sectors, the rally could stall.
      • Recession Signals: Indicators like inverted yield curves, declining consumer confidence, or slowing job growth could dampen market enthusiasm.
      • Weak Economic Data: A sustained decline in GDP growth, retail sales, or industrial production could trigger profit-taking.

    2. Monetary Policy Tightening:

      • If central banks (e.g., the Federal Reserve) continue or resume tightening monetary policy to combat inflation, higher interest rates can reduce the attractiveness of equities and speculative assets.
      • Markets often price in future rate changes, so even the anticipation of a hawkish shift can end a rally.

    3. Valuation Concerns:

      • If valuations in key indices or sectors become overstretched (e.g., P/E ratios significantly above historical averages), investors may rotate into safer assets or underperforming sectors.

    4. Geopolitical or External Shocks:

      • Events like wars, natural disasters, or unexpected geopolitical conflicts can create risk-off sentiment.

    5. Technical Overextension:

      • If technical indicators (e.g., RSI, MACD) show overbought conditions, or if the market breaks key support levels, it could lead to a correction.

    What Does the Future Look Like?

    The future of the markets will likely depend on the interplay of several factors:

    1. Macro Themes:

    • Slower Growth, but Not Recession: Many anal cysts predict a period of slower growth in 2025 as the global economy adjusts to higher rates and fading fiscal stimulus.
    • Inflation Control: If inflation continues to moderate, central banks may pivot to a more accommodative stance, supporting equities.
    • Energy Transition and Innovation: Sectors like green energy, AI, and biotechnology may see strong growth, driving sector-specific rallies.

    2. Market Rotation:

    • We may see a rotation into value stocks or defensive sectors (e.g., utilities, healthcare) as growth stocks and speculative assets come under pressure.

    3. Risk Management Focus:

    • Diversification and risk management will remain critical. Geopolitical tensions, energy market volatility, and climate risks may lead to more frequent market disruptions.

    4. Technology-Driven Growth:

    • AI, automation, and digital transformation will likely continue to drive market leadership in tech-heavy indices.

    5. Retail Investor Influence:

    • Retail investors, empowered by platforms like Robinhood and increased financial literacy, may continue to drive higher volatility and rapid sentiment shifts.

     

    Me:

    Point number 5 is utter bullshit. Other than the occasional Game Stop episode, retail investors play less of a role in the markets than a pimple on Jerome Powell's ass. Retail investors don't drive volatility, nor sentiment shifts. This is canned Wall Street bullshit. 

  8. Good Game Management 1/17/25

    in The Daily Stool - Stock Market Message Board

    Posted

    23 minutes ago, SiP said:

    Everyone has differect Alvin. You also need to know how to ask them.

     

    Here is my prompt to ChatGPT

    "Why are U.S. market indexes such as the S&P500, Nasdaq100 rising today?"

    and answer

    The growth in U.S. market indices like the S&P 500 and Nasdaq 100 today can be attributed to several key factors:

    1. Strong Economic Data: The Commerce Department reported that housing starts and permits exceeded estimates, indicating a robust housing market. Additionally, the Federal Reserve's report showed higher-than-expected industrial production growth in December.

       

    2. Positive Corporate Earnings: Major U.S. banks, including JPMorgan Chase, Wells Fargo, and Goldman Sachs, reported substantial fourth-quarter profits, reflecting optimism about the U.S. economy. JPMorgan Chase, for instance, achieved an annual profit of $58.5 billion, the highest ever for a U.S. lender.

       

    3. Rebound in Technology Stocks: Tech giants such as Apple, Nvidia, and Tesla saw their stocks rebound after recent declines, contributing to the rise in indices heavily weighted by technology companies.

       

    4. Easing Treasury Yields: A dip in Treasury yields has made equities more attractive, providing a boost to stock prices.

       

    These factors combined have led to a positive performance in the U.S. stock markets today.

    The answers are randomly different. Ask the same question a few minutes apart and it will give a different answer. And yes, if you phrase the question differently, the answer will be different.  You can also direct it to the answer you want by asking it to consider different things.

    I find it amazing that when I simply upload a chart and give it no other information or direction, it does a very good job of correctly analyzing the TA. 

  15. Good Game Management 1/17/25

    in The Daily Stool - Stock Market Message Board

    Posted

    Just got back from lunch and saw the market launched. So I asked Alvin WTF happened..

    Alvin: 

    This morning's breakout in E-mini S&P 500 futures (ES) was primarily influenced by the release of December's Producer Price Index (PPI), which indicated a slowdown in inflation. The PPI data showed that inflationary pressures are easing, leading investors to anticipate a more dovish stance from the Federal Reserve regarding future interest rate hikes. This sentiment boosted market confidence, contributing to the upward movement in ES futures.

    Additionally, reports that the incoming Trump administration is considering a gradual implementation of tariff hikes further alleviated market concerns about potential inflationary impacts. This approach suggests a more measured trade policy, which investors interpreted positively, adding to the bullish momentum in the futures market.

    These developments collectively fostered an optimistic market outlook, triggering the breakout observed in ES futures this morning.

  16. Good Game Management 1/17/25

    in The Daily Stool - Stock Market Message Board

    Posted

      

    8 hours ago, Takachi-1 said:

    It just seems like there is no consequence to this.....    will it ever come to an end?

    I must admit. The house is good at managing the games and making sure they win.  

    As for the rest of us, cannon fodder. But the smart money takes its cut. 

    Today, the ES has formed a range of 5925-5977, and looks set to run to the top of the range. Then what? If the hourly oscillators manage to turn up from the zero line, that would support a subsequent breakout. If they get stuck where they are, then the market should top out here and head back down. 

    Oscillators dropping below the zero line from current levels or near, would portend a price breakdown. 

    18haaa

    What does Alvin, of Alvin and the Chat Monks (aka ChatGPT) say? 

    Outlook for Today's Market:

    1. Trend Analysis:

      • The price seems to be oscillating within a defined channel. A breakout above the green channel resistance (near 5970-5980) could signal further upward momentum.
      • Conversely, breaking below the lower bounds of the channel (near 5920-5940) may indicate bearish sentiment for the day.

    2. Key Levels to Watch:

      • Support Levels: 5925, 5900, and 5880 are prominent support zones. If these levels are broken, it could lead to more selling pressure.
      • Resistance Levels: The price is nearing the resistance zone around 5975-5990. A breakout above this area may trigger a rally toward 6025-6035.

    3. Indicator Overview:

      • MACD: If it's crossing above the signal line, it suggests bullish momentum. A downward cross may indicate weakening momentum.
      • True Strength Index & Fisher: These oscillators can confirm overbought or Dover Sole conditions. If these indicators are turning up, it signals recovery; if down, they indicate caution.

    4. Volatility and Momentum:

      • The Momentum indicator suggests the strength of recent moves. If it's flat or declining, today's moves might consolidate, whereas an uptick indicates strong price movement.

    Suggested Approach:

    • Monitor breakout or breakdown from the channel for directional cues.
    • Utilize tight stop-losses due to the proximity of critical levels.
    • Pay attention to macroeconomic data or news releases that may influence market behavior during the day.

    I was curious to see his general take on market news. Interesting, concise summary from leading sources. 

     

    As of Friday, January 17, 2025, here are the key developments influencing today's stock market:

    Market Movements:

    • U.S. Stock Futures: Futures indicate a positive opening, with bond yields declining. This follows a previous downturn led by technology stocks.

    • Asian Markets: Mixed performance observed. China reported a 5% economic growth for 2024, meeting government targets but slowing from the previous year. Hong Kong's Hang Seng and Shanghai Composite indices rose slightly, while Japan's Nikkei 225 declined by 1%.

    Corporate Highlights:

    • Apple (AAPL): Shares rose 0.5% in premarket trading, rebounding from a 4% drop on Thursday due to losing market share in China.

    • Qorvo (QRVO): Surged 7.4% after Starboard Value acquired a 7.7% stake, aiming for changes to improve share price.

    • Rivian (RIVN): Increased 3.7% after securing a $6.6 billion loan from the Department of Energy to build a new manufacturing facility.

    Economic Indicators:

    • Inflation Data: The December consumer-price index showed prices rising 2.9% over the past 12 months, matching forecasts, while core prices were up by a slower-than-feared 3.2%. This led to a rally in both bonds and stocks.

      WSJ

    • Earnings Reports: Major financial institutions like Goldman Sachs, JPMorgan, and Wells Fargo posted substantial profit increases, exceeding forecasts.

      WSJ

    Regulatory Developments:

    • SEC Rule Change: The Securities and Exchange Commission approved a rule change allowing stock prices to be quoted in increments of $0.005, effectively introducing half-cent pricing. This aims to reduce costs for investors by narrowing bid-ask spreads.
      WSJ

    Investor Sentiment:

    Despite recent declines in major indexes due to mixed earnings reports and economic data, underlying market strength remains, with several stocks showing buy signals. Investors are advised to monitor key levels and stay informed on macroeconomic data and corporate earnings reports.

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    __________________________________________________
     
    I don't know whether this is awesome or awful. 
     

    Moron the markets:

    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 Be sure to respond to the confirmation email which is sent instantly. If not in your inbox, check your spam folder.

     

  17. Monster Move- 1/16/25

    in The Daily Stool - Stock Market Message Board

    Posted

    26 minutes ago, specie said:

    i'm probably wrong on this but it seems to me that falling t-bill yields may cause more money to flow to RRP thereby tightening things for the market.  I don't know.

    Money flows into RRP when there are no T-bills to be had when T-bills are paid down. The issuance of $87 billion in new bills next week will pull cash out of the RRP fund into T-bills. Then when the T-bills start being paid down, probably next week, because of the debt ceiling that will force money back into the RRP facility. The two have an inverse relationship over time. 

    The green line on this chart is the Fed Fun Rate. 

    18gydh

    $94 billion is a new low in the RRP slush fund. It will get damn close to zero next week. The Treasury will be in no rush to raise the debt limit. It will want to RRP slush fund to rebuild first. 

    image.png

    More here:  Macro Liquidity Trends: Insights on Repo, Treasury Actions, and Market Dynamics 

     

  20. Monster Move- 1/16/25

    in The Daily Stool - Stock Market Message Board

    Posted

    Alvin says make or break here: 

    tvc_631ebe9ac5985abc597e7ec9a6c1c312.png

    Alvin:

    This chart is packed with information, but here's my take on what it signals:

    1. Rising Green Channels: The price is in a strong upward momentum within the green channel, suggesting bullish control for now. These channels often act as both support and resistance during an uptrend.

    2. Red Resistance Levels: The multiple red lines above the current price indicate a dense cluster of resistance levels, which may hinder further upward movement. If the price approaches these levels, a pullback or consolidation is possible.

    3. Indicators:

      • Momentum and Oscillators: The oscillators below the chart show upward movement but seem to be peaking, which could indicate diminishing momentum and the potential for a retracement.
      • MACD: Appears to be in positive territory, but if the lines begin to converge, it could signal waning bullish momentum.

    4. Short-Term Concern: Given the congestion of lines in the red zone above the price and the historical pattern of reversals in similar zones, a pullback or test of the green channel's lower boundary wouldn’t be surprising.

    5. Long-Term Perspective: If the price remains in the green channel and breaks through the upper resistance, it could lead to a continuation of the rally. However, a break below the channel would suggest caution.

    This setup feels like a "make or break" moment where the next few bars could confirm whether the bulls still have control or if the bears are ready to take over.

  24. Monster Move- 1/16/25

    in The Daily Stool - Stock Market Message Board

    Posted

    As I've done this week, I again uploaded the chart to my market guru Alvin, of Alvin and the Chat Monks (aka ChatGPT). Here's his take. 

    Alvin: 

    The hourly chart you provided for the ES (S&P 500 futures) reflects a lot of technical indicators, channels, and lines. Here's a breakdown based on what I can interpret visually:

    1. Trending Channels:

      • Green Channels: Indicate areas of bullish movement. The most recent price action appears to be within an ascending green channel, suggesting bullish momentum in the short term.
      • Red Channels: Represent bearish trends or resistance zones. Prior price action has broken through a red bearish channel and entered the green bullish zone.

    2. Moving Averages:

      • Multiple moving averages (MAs) are plotted, providing a sense of trend and support/resistance levels.
      • The blue MA (likely a longer-term MA) seems to align with key support levels, while shorter-term MAs (red/green) are supporting the current upward move.

    3. Key Price Levels:

      • Resistance near 5980-6000: The price is approaching a significant resistance zone, as indicated by horizontal red lines.
      • Support near 5908-5920: If the price retraces, these levels could provide immediate support.

    4. Indicators Below:

      • Momentum (Mom): Shows rising momentum, consistent with bullish price action.
      • MACD: Appears bullish, with the fast line above the signal line and potentially widening, suggesting upward momentum.
      • True Strength Indicator (TSI): Is likely overbought but still showing bullish strength.
      • Fisher Transform: Supports bullish continuation but may also suggest caution if it’s approaching overbought territory.

    5. Potential Outlook:

      • Bullish Bias: The price is trading within a rising channel, and the momentum indicators confirm strength.
      • Resistance Test: Watch for reactions at the 5980-6000 zone. A break above could target higher levels.
      • Pullback Risks: If momentum stalls, a pullback toward the 5920 zone would still maintain the broader bullish structure.

    Actionable Takeaways:

    • For longs: Consider holding as long as the price remains within the green channel and above the 5920 level.
    • For shorts: Look for signs of reversal near the 6000 level, especially if indicators signal overbought conditions.

  25. Monster Move- 1/16/25

    in The Daily Stool - Stock Market Message Board

    Posted

    Yesterday's massive market move extended in the pre-market this morning. The ES, 24 hour S&P futures  5 day cycle projection on the hourly chart is now 6025-30. That puts it on a course to test the recent high later today. That's provided the futures stay above sharply rising trend support. That line will be around 5965 at the New York open, rising to around 5980 at the close. 

    Breaking that line would at first signal only a slowing of the upmove and widening of the channel in force. The first reversal signal would require an hourly close below 5942. Barring that, all systems will remain go on the upside. S&P 500’s Critical Crossroads: What Lies Ahead for the Markets? 

    18gj4o

    Moron the markets:

    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 Be sure to respond to the confirmation email which is sent instantly. If not in your inbox, check your spam folder.

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