Here's Why We're Headed for a Deflationary Crash- 11/17/23

[DrStool]

13 hours ago, TurdButter said:

I think a deflationary crash is certainly possible, we've gotten debt levels to absolutely crazed levels with the frenzy of the last few years and in no way is there enough cash flow to continuously cover it, and that will get worse in a secular trend of rising rates. And the economy of the last few years would certainly seem to fit a crack up boom. I remember the 70's as a kid, didn't get started on money mangling until literally a month after the big 1982 low. That's probably the preferred outcome by the  them, but at this scale it may be real hard to avoid deflation- and I think Central Banking overall is the biggest bubble still standing.

That's certainly possible. But I suspect that the central banks would go all out to preserve enough inflation to inflate the debt away in the context of our remaining lifetimes. How successful they would be is another question. I don't speculate about the long term because I think that it's unpredictable. The longer the look ahead, the more variables come into play. I'm no good at that level of chess. 

In the very short run, it's difficult enough to forecast what's likely to happen today. I look at the hourly chart of the ES, 24 hour S&P futures for that. It's still in an uptrend, but precariously so. As of the 5-6 AM hour in NY, the key trendline is at 4515. Then in the next hour there's a convergence at 4518. If they hold above those levels, there's a good chance they'll trundle higher today. The sharper trendline makes it to 4533 at today's NY close. The less sharp one goes to 4527. Holding those is critical to maintaining the uptrend. 

If they break those lines, there are two more rising below that which will end today around 4500-4503. Looking upward, key resistance is at 4525. If cleared, the hourly oscillators would be in a config that would support a huge move up from there. On the other hand there are resistance levels indicated every 10 points or so. One step at a time, I guess. 

Yesterday, the averages didn't change much but there was carnage below the top line. Many stocks got destroyed. I know because I owned every single one of them. So even if the headline number looks good, watch what happens below the surface. Breadth stinks. If it doesn't freshen up, it will be curtains for this move. Curtains, I tell ya.  

Meltup Gonna Take You Hiya

The short squeeze in bond futures got a second wind yesterday. The short term downtrend in bond yields is heading toward trend spport at 4.33. If that breaks, then the target would be the next trendline at 4.20. A 13 week cycle projection points to 4.10. The head and shoulders breakdown has a conventional measured move target of 3.95. How low can you go? Ah well, false hope springs eternal. 

Just when all hope looked lost, even gold seems to have joined the Church of New Life.

For moron the markets, see:

• Gold Has Lost Its Mojo and Is Now in Danger November 14, 2023
• Swing Trade Screen Picks – Loading Up on Buys November 13, 2023
• Meltup Gonna Take You Hiya  November 13, 2023
• Gold Bullish Pullback But Miners Are Doubtful November 8, 2023
• Fuggedaboutit! Treasury Supply Ain’t Going Away November 5, 2023
• Which to Believe, the BLS or Actual Tax Collections November 3, 2023

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[DrStool]

Test of the high as the market gets set to open. Momo is poor. 

[DrStool]

In view of the tremendous interest in this thread today, it must be a top of sorts. 

[SiP]

We are headin to ATH on NQ ES.

See presidencial cycle patern, nov-dec UP phase.

[DrStool]

Hitting trailing stops here. 

[fxfox]

 

[DrStool]

Trendlines still intact with 25 minutes to go.