DrStool Posted August 6 Report Share Posted August 6 For the last 24 hours, the pattern on the ES, hourly S&P futures chart has been bullish. Now push comes to shove. Is it a dead cat bounce, or the onset of recovery. I noted yesterday the information brought to our attention by Potatohead on the CME margin increase, that was the proximate cause of the selloff. When the margin man comes, selling ensues. By the way, the same thing happened a week before. The media makes up all kinds of ridiculous nonsense to explain these things when the explanation is very simple. Forced selling. The thing about margin calls though, is that once they are met, the selling stops. That is what happened all day yesterday after the downward adjustment at the open. The complication is the short squeeze in the bond market. It's not clear where that's going, and unless there's some relief there, then the pressure on stocks will return. A margin call is a margin call. Hedge funds and dealers will liquidate what they can to meet margin calls, regardless of where they are, or in which direction. For now, as of 7 AM ET, the rebound channel is intact, with a 2-3 day cycle projection of roughly 5340. The lower line of the uptrend channel crosses 5235 as of the NY open, and 5265 at the close. If they stay above that, it'll be up up and away for today. Even if it breaks, I think we gotta break 5200 to get anything going on the downside again. Implications of Market Ahead of Itself Looking at the 10 year yield, I'd say that the short squeeze in Treasuries may have reached its short term nadir yesterday at 3.68, which appears to meet the requirements of a 13 week cycle low, and a likely 6 month cycle low. Why Primary Dealers Net Short Fixed Income Is Now Bad News for Stocks August 1, 2024. For moron the markets, see: Swing Trade Screen Picks – Missing 80% August 5, 2024 Implications of Market Ahead of Itself August 5, 2024 Tax Collections Were Worse than the Jobs Report But… August 5, 2024 Why Primary Dealers Net Short Fixed Income Is Now Bad News for Stocks August 1, 2024 Stars Suddenly Align for Gold August 1, 2024 End Stage Hysteria Breaks July 24, 2024 Picking Up Nickels in Front of a Steamroller July 9, 2024 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. Quote Link to comment Share on other sites More sharing options...
SiP Posted August 6 Report Share Posted August 6 huge bounce. incides trade like memcoins Quote Link to comment Share on other sites More sharing options...
DrStool Posted August 6 Author Report Share Posted August 6 Might have been 3 day cycle high earlier. Quote Link to comment Share on other sites More sharing options...
DrStool Posted August 6 Author Report Share Posted August 6 It's getting late. $95 billion drawdown since July 29. That's pretty radical. It's out of character with the trend of the past 3 months. The acceleration is a reflection of the stress on the market from rising bond prices and falling stock prices. Why Primary Dealers Net Short Fixed Income Is Now Bad News for Stocks August 1, 2024 Quote Link to comment Share on other sites More sharing options...
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