DrStool Posted September 27 Report Share Posted September 27 Well, well, well, another little selloff hits support. Then... Nothing. Back to trend, square one. You can see for yourself the number they need to break today to break the uptrend, and the next number needed to create even a short term reversal pattern. Those numbers are 5721 and 5712. Meanwhile, a couple of uptrend channel lines converge at 5780 at the close today. If they clear that, look for a moonshot. If they don't, more waffling, probably higher. Stars Are Aligned The 5 day cycle should be in a down phase for a couple more days, but I'm not sure that matters in this environment. Even Hurst wrote, 54 years ago, that cycles only account for 22% of price action. Sometimes it seems like more than that, and sometimes it seems like it's zero. Hurst talked about "fundamentals" driving trends. But for me, fundamentals is more about the liquidity trend. As we have learned since the Fed ended QE, markets are quite capable of creating their own liquidity. It depends solely on animal spirits, and market participants willingness to extend leverage along with the wherewithal to extend. The US Treasury has made that amply available through the issuance of T-bills which are instantly convertible into money that can be spent to buy other assets. And the market--the dealers, institutions and hedge funds who can access the ability to repo Treasuries have been more than willing to do that. In the short run, there's also news noise, and unpredictable randomness. Liquidity and cycles are forecastable with some assurance. Randomness, by definition, is not. News is sometimes predictable, but its impact is sometimes the opposite of what we might expect. However, given all that, the markets always return to the trend they were on given liquidity and the willingness to use it. News doesn't matter. Randomness has to be taken as it comes as sometimes presenting opportunity given its placement within the trend. DItto for news. So we keep an eye on the things that are somewhat predictable and try to view the news and the randomness with a clear eye to its nothingness in the big picture. That's the perspective I try to give in reports like this one. Market Can’t Live By Repo Alone And Stars Are Aligned. Check it out. I think that you'll find the perspective useful. I'll just add that if you're paying attention, you'll know what's coming long before the mainstream Wall Street media even notices that it's here. KNOW WHAT’S HAPPENING NOW, before the Street does, read Lee Adler’s Liquidity Trader risk free for 90 days! Act on real-time reality! For moron the markets see: Market Can’t Live By Repo Alone September 25, 2024 Swing Trade Screen Picks – Let ’em Ride September 24, 2024 Stars Are Aligned September 23, 2024 Gold Sings Higher and Higher September 19, 2024 Macro Money Blows the Roof Off September 17, 2024 Stock Market Has Perfect Lineup for Fall Classic September 16, 2024 Primary Dealer Clown Show Danger Pales in Comparison to Hedgie Daredevils September 11, 2024 Here’s Hard Evidence that the Slowing Economy Narrative is False September 8, 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. 1 Quote Link to comment Share on other sites More sharing options...
SiP Posted September 27 Report Share Posted September 27 German DAX exploding to the upside SPX above 5800 on the road to 6.000 Markets like Chinese easing. Announce new easing today. Quote Link to comment Share on other sites More sharing options...
SiP Posted September 27 Report Share Posted September 27 look at iShares China Large-Cap ETF Quote Link to comment Share on other sites More sharing options...
SiP Posted September 27 Report Share Posted September 27 Most CBs started easing process, China pump money, markets react accordigly, at leats this moment. bitcoin broke to the lower high patter and flirt with 65k. Quote Link to comment Share on other sites More sharing options...
SiP Posted September 27 Report Share Posted September 27 Dollar about to move big to the toilet? Look and EURUSD and DXY (50% is EURO of course). Quote Link to comment Share on other sites More sharing options...
SiP Posted September 27 Report Share Posted September 27 end of the month dressing in progress Quote Link to comment Share on other sites More sharing options...
DrStool Posted September 27 Author Report Share Posted September 27 Market Can’t Live By Repo Alone Here’s a Gold Thing Going Parabolic Quote Link to comment Share on other sites More sharing options...
potatohead Posted September 27 Report Share Posted September 27 Are animal spirits about to return? Margin debt is not at an all time high.....yet Quote Link to comment Share on other sites More sharing options...
DrStool Posted September 27 Author Report Share Posted September 27 Nice chart. Note the lead time on negative divergences. That's useful. Few more months here, looks like. Quote Link to comment Share on other sites More sharing options...
DrStool Posted September 27 Author Report Share Posted September 27 11 minutes ago, potatohead said: Are animal spirits about to return? Margin debt is not at an all time high.....yet Thing is, animal spirits never left. They've been raging for two years almost non-stop. Just a breather here and there. They don't need no stinkin' margin debt! They have cash and repo. In other words if you can borrow 97% against your T-bills from now to kingdom come, why borrow against your volatile stocks and risk margin calls? That's my guess why it's lagging. 1 Quote Link to comment Share on other sites More sharing options...
potatohead Posted September 27 Report Share Posted September 27 3 minutes ago, DrStool said: Thing is, animal spirits never left. They've been raging for two years almost non-stop. Just a breather here and there. They don't need no stinkin' margin debt! They have cash and repo. In other words if you can borrow 97% against your T-bills from now to kingdom come, why borrow against your volatile stocks and risk margin calls? That's my guess why it's lagging. Agree. I think you nailed it in your liquidity reports, where the money creation is coming from to drive this market higher. Amazes me that your analysis is not going viral. This social media game is all about entertainment. Your reports are priceless for anyone wanting to understand the plumbing. Quote Link to comment Share on other sites More sharing options...
SiP Posted September 27 Report Share Posted September 27 Best week since 1998 on stock markets Meanwhile, the rally in the price of shares of Chinese companies listed on both stock exchanges in the Middle Kingdom and overseas trading floors continues. The SZSE Component index gained 6.7 percent on Friday in Shenzen. The FTSE China A50 on the Shanghai Stock Exchange gained nearly 3.6 percent. The CSI 300 Composite Index, which includes companies listed in Shanghai and Shenzhen, rose nearly 15 percent during the week, its best performance since November 2008. In Hong Kong, the Hang Seng index went up 3.2 percent, surpassing 20,000 points and scoring its best week since 1998, rising 12.9 percent in that time. Let's not forget, however, that this is actually a rebound from the multi-year lows that Chinese indices have hit this year as a result of concerns about the state of the local economy, which the authorities now want to stimulate. Quote Link to comment Share on other sites More sharing options...
Takachi-1 Posted September 27 Report Share Posted September 27 24 minutes ago, potatohead said: Agree. I think you nailed it in your liquidity reports, where the money creation is coming from to drive this market higher. Amazes me that your analysis is not going viral. This social media game is all about entertainment. Your reports are priceless for anyone wanting to understand the plumbing. Ditto, how are you not famous! Majority of traders I talk to just don't care (or understand) about the underpinnings.... "Whats Hot!" Quote Link to comment Share on other sites More sharing options...
DrStool Posted September 27 Author Report Share Posted September 27 30 minutes ago, potatohead said: Agree. I think you nailed it in your liquidity reports, where the money creation is coming from to drive this market higher. Amazes me that your analysis is not going viral. This social media game is all about entertainment. Your reports are priceless for anyone wanting to understand the plumbing. Thanks as always! Unfortunately, it's not going viral. It's going antiviral. Quote Link to comment Share on other sites More sharing options...
DrStool Posted September 27 Author Report Share Posted September 27 So what's moving the Dow? Quote Link to comment Share on other sites More sharing options...
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