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Your Tax Dollars At Work Through the Plunge Protection Team 10/14/22

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This week in swing trade chart picks: 

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The sell signals from the week before seem to have been correct, if a bit early, but the increased volatility in the market is something that this timid anal cyst hasn’t learned to handle yet. Does it call for looser stops? Or extending the stopless period from one week to two, while managing risk through limiting exposure combined with diversification?

There’s only one way to find out. Trial and error. Mostly error. That costs money, but my goal is always that the end result justifies it, by steadying and increasing the profit stream.

So October is off to a bad start for this exercise, but we’ll hang in there, and attempt to finish the month on a positive note.

For the week ended October 10, there were 14 charts with second or third buy signals on Monday, and 57 with second or third sell signals. Bears increased their edge from where it was in Friday, despite the advancing age of the downswing. This is an entrenched bear market that has the potential of accelerating on the downside. 

On Monday, on a standalone basis, there were 10 buys and 44 sells. I worried last week that this downswing looked mature, and prone to short covering spikes. Sure enough we got one. But it fizzled as quickly as it appeared, after taking out everybody’s short covering stop orders.

Such spikes actually weaken the market in an environment of tight liquidity that’s only getting tighter.

Assuming that that view is correct, then we should see a demonstration of it in the next week or so. So I reviewed the charts accordingly this morning. Yes, there’s increased risk with late cycle entries, but there’s also the potential for greater and faster reward. We pays our money and takes our chances.

After visually reviewing the charts of this week’s multiple buy and sell signals, I chose no buys. But there were 8 sells that I’m adding to the list as shorts. These are listed in the table below, with charts at the end of the report.

Swing Trade Screens – Plunging in on the Short Side October 11, 2022

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31 minutes ago, potatohead said:

THE US TREASURY HAS ASKED MAJOR BANKS WHETHER IT SHOULD BUY BACK SOME US GOVERNMENT BONDS IN ORDER TO IMPROVE MARKET LIQUIDITY.

What the fuck answer do they expect. Its dealers are getting crushed and the Treasury is holding $584 billion in cash. They're holding that cash for just such occasions. Paydowns are always an option.  

Look Out For the Real Fallout of Declining Withholding Tax Collections – Part 2

 

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2 minutes ago, DrStool said:

What the fuck answer do they expect. Its dealers are getting crushed and the Treasury is holding $584 billion in cash. They're holding that cash for just such occasions. Paydowns are always an option.  

 

https://www.reuters.com/markets/us/us-treasury-asks-major-banks-if-it-should-buy-back-us-government-bonds-2022-10-14/

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8 minutes ago, potatohead said:

Once again, a temporary bandaid, one shot deal that will get everybody bulled up for nothing.  

Look Out For the Real Fallout of Declining Withholding Tax Collections – Part 2

 

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10 minutes ago, DrStool said:

What the fuck answer do they expect. Its dealers are getting crushed and the Treasury is holding $584 billion in cash. They're holding that cash for just such occasions. Paydowns are always an option.  

 

Markets Face Catastrophe as Dealers Mitigate Too Little Too Late

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As I'm sitting here watching the ^DJI struggling over and over again to regain the swing point at 30k...1974979488_30k-October142022.thumb.jpg.702309cd08837d87cd7aa3c03c63be40.jpg

I can't get this chart out of my head.

1091494326_ThisIS...IT-September242020.thumb.jpg.4f564a910efbdadfeec11806f7ec6b57.jpg

I posted the above chart along with...The Beginning..., The Middle..., and The End... charts that I posted a few weeks back. 

These were my favorite charts of the year.

I'd love to see a bearish engulfing candle in the SPX today. 

Hey...a fella can dream can't he?

Best,

TCG

oh...and...

It's a slow day...I'll repost all three of those charts again below.

What's really important to catch here...is the 10x fold nature of the base.  You've had to endure me mention 1x - rest period - 1x how many times?  Now...just change that to 10x - rest period - 10x...where the rest period is "The Middle".  Can you see it?  It IS all one formation...

The Beginning...

1065622103_TheBeginning-September232022.thumb.jpg.072d57250caccc84d303d91f49c410ea.jpg

The Middle...

1110303593_TheMiddle-September242022.thumb.jpg.e9f23dbc55fdb33cd30d1361593ebe77.jpg

The End...

415790442_TheEnd-September242022.thumb.jpg.5c5f79d32b6aa2b1c75a3db608688528.jpg

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Just now, The CoinGuy said:

As I'm sitting here watching the ^DJI struggling over and over again to regain the swing point at 30k...I can't get this chart out of my head.

1091494326_ThisIS...IT-September242020.thumb.jpg.4f564a910efbdadfeec11806f7ec6b57.jpg

I posted the above chart along with...The Beginning and the End charts that I posted a few weeks back.  These were my favorite charts of the year.

I'd love to see a bearish engulfing candle in the SPX today. 

Hey...a fella can dream can't he?

Best,

TCG

great analysis. Looking over the edge while every retired individual has been sucked into the markets due to zero interest rate policy for the last 15 years. 

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Janet Yellen was the only Fed chair since Volcker who tried to shrink the Fed's balance sheet and drain excess liquidity before inflation gave the Fed no choice.

So what happened?

She was replaced. 

And Powell repeatedly shit the bed. 

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3 minutes ago, DrStool said:

Janet Yellen was the only Fed chair since Volcker who tried to shrink the Fed's balance sheet and drain excess liquidity before inflation gave the Fed no choice.

So what happened?

She was replaced. 

And Powell repeatedly shit the bed. 

Are most Treasuries on banks balance sheet in the form of  held-to-maturity or held-for-trading/ available-for-sale. I was under the impression that the majority of treasuries are  held-to-maturity from an accounting basis and not marked to market.  Where as the primary dealers have to mark to market their losses.

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