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I Don't Really Care 1/11/23

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Whether this is a bear market rally or a new cyclical bull market matters not. My purpose here is not to fix the ills of central bank market rigging and excessive speculation.  I'll take whatever the market gives, and do my slanty headed best to report my observations accurately and without bias. 

In this thread, we stick to the day to day. For the bigger picture, I invite you to join me at Liquidity Trader, where subscribers get my best insights on the big picture from the monetary liquidity, and technical perspectives. I have been known to get a few things right. 😊

Meanwhile, back here at Stade FC Capitalstool, today's hourly ES S&P 24 hour fuguetures market chart looks like this. Up, as of 5:30 AM New York time. Ever optimistic European traders see only blue skies smiling at you. As always, the US looks to France, Germany, and the UK, for leadership and guidance. 

OK. Not. 

But here it is. 

First things first, they broke a downtrend this morning. The shortest and next longest channels are bullish. The 2-3 day cycle projection is 3950. We've had a little stall here at 3930 this morning, although I don't see why on this chart. It's meaningless unless they drop back under 3914. 

z-jp1

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Words never matter. They only provide tradeable or fadeable moments. Liquidity drives markets. It can only come from one of two places. Central banks, or leverage, i.e. debt creation, i.e, margin or repo. Leverage driven markets have a limited shelf live. Live by leverage, die by it.

LIQUIDITY TRADER- MONEY TRENDS

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Seems like most pundits are watching this rally and concluding that the economy won't be so bad. 

Whatever. It's irrelevant. But the headlines that known bears on the economy like J Demon and P kRugman are softening their harsh view suggests a fade here. 

You Think That Was The Bottom? Think Again

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Recession is bullish because it prompts the Central Bank to print money. I don't know why investors are so scared of recessions. They are the most bullish environment for stocks. The first 40% upmove is usually a lightning move from the early days of the recession. 1982, 1992, 2003, 2009, 2020. 1974. 

Ya could look it up. 

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58 minutes ago, DrStool said:

Recession is bullish because it prompts the Central Bank to print money. I don't know why investors are so scared of recessions. They are the most bullish environment for stocks. The first 40% upmove is usually a lightning move from the early days of the recession. 1982, 1992, 2003, 2009, 2020. 1974. 

Ya could look it up. 

ive seen a chart that presented the view that fed pivot is v. bearish for stocks and many selloffs happens after they lower the funds rate, and we are still before that.

Fj-x-dYVQAAOgKg.jpg

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European Blue chips index Euro Stoxx 50 just need 6% and we would make a ATH. Amazing because you read about energy crisis, recession coming, and other stuff. same as with Dow Jones Indu Avg.

DAX is pushing higher, same as french CAC. An another month like this and we have ATH for sure.

I think its underline the importance of not reading the media and not taking any findings from it, even economist. Just play pure TA, have entry point on daily and weekly intervals and play by it, without looking at press. its all waste of time.

I could also say that 95% of fintweet experts skip this huge rally since October in Europe and EM markets + drop in USD.

This moves tells me again - almost everything is a waste of time. Its better just to look at charts, and nothing more.

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8 minutes ago, SiP said:

ive seen a chart that presented the view that fed pivot is v. bearish for stocks and many selloffs happens after they lower the funds rate, and we are still before that.

Yes. That's the case when CB's do not add liqui again into the system.

The catapult moves form March 2003 and March 2009 and espacially late March 2020 happen when the CB's inject new liquidity.

So:

1. Pivot --> stocks so la la

2. Cut --> stocks tumble because fearing recession (thats why CB cut)

3. Liqui injection because of recession --> stocks rise. Fast. 

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Tracking information on orders and other indicators doesn't make sense either. Many are falling, yet markets are rising. I think most have a huge disconnect between what they read, see and how the market is behaving, especially outside the US. Literally two worlds - a kind of matrix.

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4 hours ago, SiP said:

ive seen a chart that presented the view that fed pivot is v. bearish for stocks and many selloffs happens after they lower the funds rate, and we are still before that.

Fj-x-dYVQAAOgKg.jpg

The Fed didn't ease monetary conditions until March 2009. And in the cycle before that, real Fed easing began in March of 2003.

If you use Prechter as a source of "information," please be aware that he hasn't been right about anything in about 30 years. That he said the Fed pivoted at those points on his chart doesn't make it true.

Again, interest rates are irrelevant as a guide to stock prices or anything else. They are simply the price of money, which is a reflection of the supply and demand for money. The Fed controls only the supply of money (and not completely). Banks can expand the money supply on their own, if there's net credit demand. The Fed does not set interest rates through its pronouncements. It influences them, both the long and short end, by the amount of money it supplies to the market, and by what means.  

Last I looked the Fed was withdrawing $90 billion a month from the banking system and thereby the markets. Speculative buyers have taken matters into their own hands, to increase the money in the market, but it has been less than the amount of money that the Fed is removing. That's why this bull move in stocks will be limited in size and duration. 

Composite Liquidity Still Bearish, No End in Sight

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47 minutes ago, SiP said:

European Blue chips index Euro Stoxx 50 just need 6% and we would make a ATH. Amazing because you read about energy crisis, recession coming, and other stuff. same as with Dow Jones Indu Avg.

DAX is pushing higher, same as french CAC. An another month like this and we have ATH for sure.

I think its underline the importance of not reading the media and not taking any findings from it, even economist. Just play pure TA, have entry point on daily and weekly intervals and play by it, without looking at press. its all waste of time.

I could also say that 95% of fintweet experts skip this huge rally since October in Europe and EM markets + drop in USD.

This moves tells me again - almost everything is a waste of time. Its better just to look at charts, and nothing more.

TAK BARDZO! 

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I don't track European markets. Hard to believe these rallies can be sustained with the ECB taking money out of the system via the LTRO repayments. 

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