DrStool Posted January 12 Report Share Posted January 12 The pattern on the ES hourly chart is as inconclusive as it gets. The pattern is still one of higher lows, but all upside projections have been met in the time frames that concern us here. So we wait for clarification of what might be next. At this point the relevant range is 4739 to 4803. Within that range, it's all noise all the time. And a breakout doesn't guarantee an extended run. There are trend resistance lines every few points up to 4818. Above that would clear sailing for a while. On the downside, there are multiple potential spport lines that could generate bounces. I can't get excited about it until I see a clear top breakdown with a downside cycle working. For moron the markets, see: Gold Outlook Increasingly Hopeless January 11, 2024 Swing Trade Screen Picks – Market Lacks Conviction, But 3 New Picks Have Potential January 9, 2024 Nothing is Broken January 8, 2024 Critical Pullback for Gold January 4, 2024 US Economy Didn’t Crash in December? January 4, 2024 US Economy Crashed in December – Nope, See Update January 3, 2024 Macro Liquidity – The Party’s Over January 1, 2024 Dealers Stay Extended December 16, 2023 This Chart Tells Us Exactly When the Bull Market Will End November 26, 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. Link to comment Share on other sites More sharing options...
DrStool Posted January 12 Author Report Share Posted January 12 Best fit. Link to comment Share on other sites More sharing options...
Jimbo Posted January 12 Report Share Posted January 12 THE FED's GAME PLAN Yes it has a game plan. A rather sad one....but it is a plan. Here it is: 1/ Use as much of the back ground liquidity still remaining from the big print to plug the treasuries gap. RRP, whatever. 2/ Prop up the banks by replacing the deposits as they flow out to feed the defecit beast. Alphabet soup programs etc. 3/ Layer on the synthetic QE when needed. When the ten year rate gets too high say over 5% trundle out Printer Jay or one of the minions to say something nice and positive about QE. Give the impression the real stuff is not too far away. 4/ When the above stops working start tapering the QT. 5/ When tapering the QT stops working roll out as much real QE as required. Link to comment Share on other sites More sharing options...
fxfox Posted January 12 Report Share Posted January 12 21 minutes ago, Jimbo said: THE FED's GAME PLAN Yes it has a game plan. A rather sad one....but it is a plan. Here it is: 1/ Use as much of the back ground liquidity still remaining from the big print to plug the treasuries gap. RRP, whatever. 2/ Prop up the banks by replacing the deposits as they flow out to feed the defecit beast. Alphabet soup programs etc. 3/ Layer on the synthetic QE when needed. When the ten year rate gets too high say over 5% trundle out Printer Jay or one of the minions to say something nice and positive about QE. Give the impression the real stuff is not too far away. 4/ When the above stops working start tapering the QT. 5/ When tapering the QT stops working roll out as much real QE as required. Yes. To think that they would do nothing once the slush fund is empty is naive. They simply gonna establish a new thing. They will not allow even a 20% downmove. IF there is downmove then it will be in Q1. They gonna keep the market somewhere between 4500-5000 in the months before the election. Link to comment Share on other sites More sharing options...
fxfox Posted January 12 Report Share Posted January 12 Bitcoin weekly candle. Nice. Link to comment Share on other sites More sharing options...
fxfox Posted January 12 Report Share Posted January 12 Link to comment Share on other sites More sharing options...
DrStool Posted January 12 Author Report Share Posted January 12 2 hours ago, fxfox said: Yes. To think that they would do nothing once the slush fund is empty is naive. They simply gonna establish a new thing. They will not allow even a 20% downmove. IF there is downmove then it will be in Q1. They gonna keep the market somewhere between 4500-5000 in the months before the election. They have already established it. It's called the SRF, the Sitting Repo Fartcility, and it will only have limited effectiveness. QE is coming. Absolumente. Just a question of when. As for deposits flowing out to fund the deficit--this is impossible. The deposits are withdrawn to buy Treasuries, but the Treasury spends the money in the next week, whereby the cash flows back into bank deposits from the Treasury account. The only way money can be destroyed is by QT or debt reduction of any kind. QT can be offset by private debt creation as we have seen. On balance, net debt reduction would result in a deflationary crash, which would require the Fed to print mass quantities. This was the playbook in 2009. 1 Link to comment Share on other sites More sharing options...
DrStool Posted January 12 Author Report Share Posted January 12 It won't be long now, children. https://liquiditytrader.com/index.php/2023/11/26/this-chart-tells-us-exactly-when-the-bull-market-will-end/ Reverse Repo Operations 1/12/2024 RESULTS AMOUNT ($Billions) RATE (%) Collateral Type Submitted Accepted Offering Award Treasury 603.116 603.116 5.30 5.30 Link to comment Share on other sites More sharing options...
DrStool Posted January 12 Author Report Share Posted January 12 A downturn from a negative divergence this big would be huge, if they can close the deal. Macro Liquidity – The Party’s Over Link to comment Share on other sites More sharing options...
fxfox Posted January 12 Report Share Posted January 12 10 minutes ago, DrStool said: A downturn from a negative divergence this big would be huge, if they can close the deal. Macro Liquidity – The Party’s Over High beta is already cracking. And with Crapple and Teaser there are two mega caps which have the potential to crack soon. They look vulnerable technically as well as fundamentally. Link to comment Share on other sites More sharing options...
SiP Posted January 12 Report Share Posted January 12 It's hard to think about levels above 5300 spx. Would love to see some pullback. We are priced to perfection at the moment. Link to comment Share on other sites More sharing options...
DrStool Posted January 12 Author Report Share Posted January 12 10 hours ago, DrStool said: So we wait for clarification of what might be next. At this point the relevant range is 4739 to 4803. Within that range, it's all noise all the time. HOD 4802.2 Link to comment Share on other sites More sharing options...
WTF Posted January 12 Report Share Posted January 12 The markets are priced to the improbable... much lower markets are coming... Link to comment Share on other sites More sharing options...
fxfox Posted January 12 Report Share Posted January 12 40 minutes ago, WTF said: The markets are priced to the improbable... much lower markets are coming... There is a lot of work to be done to the downside. Maginot around 4150 would be a very tough nut to crack. If we even get there. Link to comment Share on other sites More sharing options...
DrStool Posted January 13 Author Report Share Posted January 13 Markets are not discounting mechanisms. They rise and fall on the sea of liquidity. Liquidity has two inputs. Central bank policy. Madness of crowds. Link to comment Share on other sites More sharing options...
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