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Even Bigger Breakout 10/31/23

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The market waits with bated breath for the appearance of Jaysus. The excitement builds as the crowds gather below the Papal Balcony, on the third floor of the Eccles Building overlooking the crowded squares of Wall Street and Main Street.  

In anticipation that Lord Jaysus will do something amazing, all the bears are covering their short positions. As the market rises into the day of the Lord, the question becomes, will they sell the news? 

Tell ya what my friends, I don't know if the hourly chart of the ES, 24 hour S&P futures can hold up that long. 2 PM ET Wednesday is a long time from now, let alone, 2:30 when the countenance of Lord Jaysus will appear on phones and computer screens across the world to explain his decree. The charts look fully ripe right now at 7:30 AM ET Tuesday. By the time Wednesday afternoon rolls around, they could stink again. 

That said, there's a 5 day cycle projection of 4200-4205. If the market gets there today, which looks like a darn good bet, then it will complete a really gorgeous looking head and shoulders bottoming pattern that would conventionally measure to around 4260-65. 

But with the hourly indicators already stretched, let's just look for 4205 first, and then see how things react after the appearance of the Lord as he is wont to do every six weeks. Last Week I Warned of Market Crash Potential

11ziv6

Nothing matters until the Lord has spoken, of course. If the market closes below 4163 today, then bears get the ball back. Above 4183, bulls stampede. In between, they have the ball, and if they can hold for a day or two, they'll ram it home. 

As stocks rally, so do bonds. That massive short position in the fixed income futures seems to be providing some tinder for this rally. If they break 4.80 on the 10 year, then the next target would be 4.70. Maybe the bet is that a government shutdown will mean no bond supply for a bit. I don't know, and ultimately, that would merely be just a blip. Here’s Why Macro Liquidity Still Signals Record Danger

11zizf

For moron the markets, see:

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The Treasury Department expects to issue less debt in the fourth quarter than it previously expected.  Bond investors now await verdict on the composition of this debt; it’s likely to steer yields ahead. The government will release this data in its “Quarterly Refunding” report on Wednesday, at 8:30 a.m. Eastern time.  Supply is just one driving factor for yields. But given the wide expectation of a pause in the Federal Reserve’s interest rate hiking cycle come Wednesday and with inflation firmly down from its last year’s peak, supply has come in focus.

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