Bulls Snorting 12/4/23

[DrStool]

And the Christmas goose is in the oven.

Meanwhile, I noticed something interesting this morning. Over the past year, the EUR/USD tends to lead intermediate turns in US stocks by a week or two. We got something here? 

This is a daily chart of the EUR/USD, with an overlay of the ES, S&P 500 futures daily. I have absolutely no idea why this has worked this way, or whether it will continue. I generally think that intermarket analysis is clownalysis. I just report when I notice something. You are all pros here.  You decide.  

Well, I am not a pro. I don't work on Wall Street, and I have no idea what I'm talking about, but here's our daily AM look at the hourly chart of the ES, as usual, for your listening and dining pleasure with your morning cough fee. 

The market spent a couple of weeks grinding through the enormous layer of resistance between 4540 and 4600, and Friday we had a near test of the July high, so far unsuck cess pool. That is, they didn't quite get there, and this morning, they are pulling back to trend spport. 4575 looks like a key level. If it holds, the bulls keep control. If not, then it will get interesting. 

Also, I did see on Friday that my double top secret sentiment indicator had reached such hysterical extremes that I had to carefully consider the bearish case in my own paralysis by what my anal is, is telling me. 

Meanwhile, I'll be tightening the stops on my longs. They're not just long, but long in the tooth. 

Meanwhile, meanwhile, a little show and tell on the 10 Year US Treasury Yield.  I show, you tell. 

 

For moron the markets, see:

• Christmas Goose Temperature Nears Required Doneness December 4, 2023
• Swing Trade Screen Picks – Read My Lips, No New Longs. But a Couple Shorts November 28, 2023
• 420 Friendly Market November 27, 2023
• Gold Sets Up Potential High Base BreakoutNovember 24, 2023
• This Chart Tells Us Exactly When the Bull Market Will End November 26, 2023
• A Rally Can’t Live on Hope Alone November 20, 2023
• Fuggedaboutit! Treasury Supply Ain’t Going Away November 5, 2023
• Which to Believe, the BLS or Actual Tax Collections November 3, 2023

If you are a new visitor to the Stool, please register and join in! To post your observations and charts, and snide, but good-natured, comments, click here to register. Be sure to respond to the confirmation email which is sent instantly. If not in your inbox, check your spam folder. 

[DrStool]

Was there some nooze? 

[Takachi-1]

I don't think its "intermarket" perhaps it is indicating money flow aka liquidity arriving from Europe.  just a thot

[DrStool]

Right. Stronger dollar, weaker euronary track means the flow is toward the US. But that would be bullish. And what we see on the chart is the opissit. 

[SiP]

We need healthy correction and treat this as a dip (like drop till 11.12.2023 and then go up).

[Takachi-1]

I could see a correlation in that flow with the weighting to the largest caps, money seeking relative safety.  Maybe its a lag in that you are showing futures versus spot.   Just thinking, its the big guys handling these kinds of trades, if they see a spike (or repatriation)  in flow, they might lag the futures to profit from the lag.  Maybe its just time lag to flow flow through the process.  Either way its a complement to your liquidity analysis, no?

[DrStool]

The ES futures trade in lockstep with the cash. There's very little daylight between them. Just in the non US hours. 

There's been about a 2 week lead between the uro and the S&P.  I don't understand why that would work, but it has. 

[fxfox]

The long term statistical correlation between the EUR/USD exchange rate and the performance of US Stocks is not very robust. At times it is near 1.00 and then there are times where it is like 0.50 or so.

I would intermarket analysis not completely disregard, but the problem with it is, that the correlations are not very robust and change over time. Then the hen/egg problem: Sometimes it follows oil, that leads to higher USD, which then leads too... bla bla bla...

Intermarket analysis is a wonderfull thing to talk about in hinsight. But for real life trading completely useless. Trade your own multi million dollar account with all your life savings in it and then we will talk about intermarekt analysis again...

[DrStool]

Hmmm. Check out the persistence of the negative divergence on the 2 hour bars. Goes back to November 14. 

I got flat by 10 AM. 

I am neither bull nor bear. 

I am chicken. 

Hear me cackle. 

[DrStool]

Tax Revenues and Liquidity are Crashing December 4, 2023

[DrStool]

Interesting chart. 

[DrStool]

Hmm. No one shows up even on a down day. 

If that's any indication, this will have legs. 

[DrStool]

Lawd de Lawd, I do bleeve the bonds have turned.  

So much bullishness in the papers last week. So much bullishness. Anyone who doesn't buy bonds now is missing the buy of the scent tree, they sold us... I mean told us. 

[DrStool]

Infartion point. 

[potatohead]

"I suspect that we will start to see the first buds of market dislocation before the blooms of springtime."

What a truly classic line......great report.