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Sporadic and Weak - 5/12/23

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Farewell to Berlin!

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

A post shared by Lee Adler (@200daysineurope)

And Good morning from the train to Warsaw. I expect to have a sporadic and weak internet connection while on this ride for the next 5 hours.

Have you ever noticed how the stock market imitates life and and life imitates the stock market. Yesterday it was the Wall and Checkpoing Charlie. Today it's a sporadic, weak internet connection, about the shape of the bull move in stocks. 

I noticed that of course there's a broad consensus that the debt ceiling drama will be a catastrophe. Uh... I don't think so. The markets will go on. It will be a non event. 

Meanwhile, the US Treasury has stopped paying down T-bills. The tax windfall cash was exhausted early, most likely because the debt ceiling is having an impact.

But how then do they continue to issue new debt, both bills and coupons? Easy peasy. Pay down intragovernmental debt, IOUs to things like the Social Security Trust Fund. Not sure how long that can go on. There are some legally mandated payment due dates looming.

But they probably have ways to get around that too. Frankly, it's too much budgetary arcana and speculation for me. And it's mostly useless. This market isn't going anywhere. The range is the range until it isn't. Trade the charts. 

That said, I keep wondering why my swing trade stock screens keep spitting out a plethora of buys and not many sells. Frankly, I don't trust it, but I'm going with it and letting it ride until proven wrong. For the last few weeks, it has been a nothingburger, but at least no big losses. 

Today's intraday pattern on the ES 24 hour S&P futures shows a bit of promise for the bulls, with higher lows, and a triangle pattern. The 5 day cycle is in an up phase that should run through Monday or Tuesday. If they can clear 4148, then there's a good chance of taking out the last minor high of 4158 and blasting off. If either of those levels hold, bears will still have a shot, but not much of one. Nothing will happen unless they take out 4098.  

The 5 day cycle projection is 4165-70. 

image.png

One apparently developing consensus is that a debt ceiling crunch will be bullish for longer term Treasuries. Correct in the short run, but very, very wrong in the long run. Here's why

Only if the bond bulls can get the 10 year under 3.20 do they have a shot at making an extended run. 

image.png

Meanwhile, gold's bullish big picture looks like it is set up for a pullback, but the real level to watch is 1992. Was that a good year? I don't remember. 

image.png

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If you've read my 'Pro Tip' commentary...I think it all boils down to this.

259117820_NDX-CloseofMay112023.thumb.jpg.4600bb4587657f5eece58be991cfa6e9.jpg

TCG

oh...and...

I wanted to give a quick update to my "ETH to a 1000 in 90 days" challenge.  The challenge started on April 10th(4.10) and I have 68 days left to cover 'around' 750 bucks.  Will it make it?  I could care less...the only reason I bothered to start the challenge was to point out the sheer stupidity of making a call that Bitcoin would be trading at a million dollars a share within 90 days. 

As far as I could tell...some big hitters within the space weren't exactly poo pooing the idea either.  Now...I'm a gentlemen so I won't go any further in my commentary toward those individuals other than to say....No TCG nod of approval for you.

Out of curiosity...I did take a look at the chart this morning.  It might just make it...smile.

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My "Dumb, Dumber, and Dumbest" Chart was posted early this morning, so it will be in yesterday's thread.  Here is the first Companion Chart in the series.1898929488_DumbDumberandDumbest-CompanionChart1a-May122023.thumb.jpg.4ad267840e2745bcc2008c071f8f1962.jpg

The Russell 2000 is barely holding support...while the Nasdaq is attempting a push through resistance.

Interesting.

TCG

oh...and...

Patience Pays

Maybe if I post a variation of this pattern you can understand why even TCG would never front run the above setup.   I always wait for a break on volume(and confirmation).

While the pattern eventually works in your favor...if you front run...you get treated to a nice punch in the face first.  Having spent time in the ring...I prefer the patient approach to a busted nose.

1457632930_PunchintheFace-May122023.jpg.351f2a55013ca963f205600682ab5889.jpg

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I'm heading up into the mountains a bit with this chart...the air is a little thin up here, but I think maybe one or two lurkers/posters can get it. 

If you truly want to learn... 

Study the first chart in the Dumb, Dumber, and Dumbest series...and then take a good look at this.

Take the time to give it some serious thought...

What IS going on here?  Why?  How?1535496899_DumbDumberandDumbest-CompanionChart1b-May122023.thumb.jpg.d8ea12512f0d7b6967c52977938caf1d.jpg

If you can grasp this, or if you at least try...I'll fill in the blanks going forward.

Here a little, there a little...until it ALL comes into view.

TCG

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1 hour ago, The CoinGuy said:

I'm heading up into the mountains a bit with this chart...the air is a little thin up here, but I think maybe one or two lurkers/posters can get it. 

If you truly want to learn... 

Study the first chart in the Dumb, Dumber, and Dumbest series...and then take a good look at this.

Take the time to give it some serious thought...

What IS going on here?  Why?  How?1535496899_DumbDumberandDumbest-CompanionChart1b-May122023.thumb.jpg.d8ea12512f0d7b6967c52977938caf1d.jpg

If you can grasp this, or if you at least try...I'll fill in the blanks going forward.

Here a little, there a little...until it ALL comes into view.

TCG

Fractals within fractals.

Are we looking at "The Beginning..." 1929 chart?

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I've been watching the XOI rather closely.  Although...I felt too closely...I had to revise the BIM 3 times!

It seems....the whole world is sitting on some pretty thin support(lines).

If you read my scratch sheets.  The one month cycle on the 13th(sometimes 14th) is what I was watching as a possible turn.

So...hopefully next week offers us something worth looking at...

I'll offer this up because I am watching it...

The first peak in the ^DJI at the all time high was on 11.08 in 2021.  The peak in the ^IXIC was on 11.22.  11.15 can sometimes be a pivot...or a turning point.  If you've been paying attention it's also 40 days from 10.06...and 40 days from Xmas.  There's more, but you get the idea. 

And the opposite part of the year is...Monday.

Who knows...we'll see how it goes.  Could be nothing. 

Historically, in May...the 19th through the 22nd, and the 31st can also be important days.

Everyone have a good weekend...

TCG

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To Dream the Impossible Dream

Good morning...

I would encourage you to never settle for 'Life As It Is'.

Ok...onto the business at hand.

This is what I like to call a review chart.  Why?  Because we're reviewing a few concepts already brought to the table before I build on this foundation in the next chapter. 

Really give 52.50 some serious thought.  Back when I was studying charts, we'd pour over them for hours, days...weeks.  When our brains were melting from overload...we'd cover our ears with duct tape and keep going. 

Let the other guy rely on someone for a fundamental 'narrative' of assumptions...you go directly to the source.

Fractals...within Time:

803901472_UNH2-May132023.thumb.jpg.20bd8a4dcbad1f825e339542dfc7556b.jpg

Here a little...there a little...until it ALL comes into view.

Well...

Back to...Man of La Mancha.

Can be had for less than 5 bucks on ebay...

TCG

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"Each student had to only overcome disbelief...in themselves."

Every Gold Star recipient will receive a bonus chart from yours truly.  No one gets passed by…

This chart below is for FTW, who recently forced ol’ CoinGuy to do a double-take with one of his answers to my questions.

His reply was THAT good.

I’m not joking when I say...I had to pull the chart up from my Archives and verify the answer was correct.

Congratulations.  Because you sir...nailed it.

Here is:

Be Water My Friend

1500955231_BeWaterMyFriend-May142023.thumb.jpg.5de9ccc152ab20d1a925db57d8000c5a.jpgWave Pattern Distortion.  250. 

Think it through...

Best Regards,

The CoinGuy

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THOUGHTS ON THE 30 YEAR BOND

Trading at 3.78%.

Even if inflation gets back to 2%.

The 30 year should trade at 5%.

With a balanced budget.

Add in another 3% for default risk, future inflation risk and the crowding out effect due to an unbalanced budget and it should trade at 8%.

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2 hours ago, Jimbo said:

THOUGHTS ON THE 30 YEAR BOND

Trading at 3.78%.

Even if inflation gets back to 2%.

The 30 year should trade at 5%.

With a balanced budget.

Add in another 3% for default risk, future inflation risk and the crowding out effect due to an unbalanced budget and it should trade at 8%.

Yup!

 

>: But there is no "should/should of"......

since the great financial CB take over/we are here to save you BS/crime.......

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