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5645 9/13/24

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That's the 5 day cycle projection on the ES. The ES would first need to clear a couple of resistance lines around 5620 today. The projection implies a test of the early September high of 5655. If it gets there today, I'd expect a battle royal. Otherwise pull back first and then try try again next week. 

16grfw

The bulls are getting a lot of help from the US Treasury this month, as we knew would be the case, thanks to September estimated tax collections filling the Treasury Cash Account. Here’s Hard Evidence that the Slowing Economy Narrative is False 

Market participants are getting a Treasury cash refund of $88 billion versus payments due of just $61 billion.  That's a lot of extra slosh that will be floating around until the next coupon issue at the end of the month. 

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Meanwhile, the US Treasury carry trade is alive and well. Primary Dealer Clown Show Danger Pales in Comparison to Hedgie Daredevils

16grkh

And gold broke out yesterday. The breakout of this pattern measures to 2615-2635. Gold Gets Ready to Rumble 9/12/24

16grp9

For moron the markets, see: 

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Market participants expect a decline in the rate of inflation and perhaps deflation. Commodities have been cheapening for a long time, the dollar has been cheaper, bonds have been more expensive + gold, but the stock market has been performing moderately (slowdown in economy)

There is no change to another trend on the horizon. Given the slowdown, it's hard to expect a big bull market in the stock market, for that you can expect continued good behavior in the bond market. We'll see what happens on TLT because we've just had important levels.


From the point of view of macro data, we can still see deflation and progressive stagnation in China or declining growth in the US or Europe.

 

Whats next?

For now, the conflict in Ukraine and Israel has not caused an explosion in energy prices, including oil.

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