DrStool Posted October 31 Report Posted October 31 I wrote that after the clothes yesterday. I was 5:51 PM ET, and 10:51 PM here and I had already donned my feeties-in PJs. 14 hours ago, DrStool said: That was the top. See you tomorrow. Now, before you get two eggs cited, in this this thread we're only talking about the next day or so. And lo and behold. As I write I was right. But tomorrow is an udder day. The cows will come home. The bulls are always out standing in their field. Market Broke for Second Wind For today, here's how it looks on the hourly ES, 24 hour S&P fuguetures. What a mess. I guess both hearts and channels are made to be broken, especially in this market. Yesterday's Whipsaw Madness is today's crash. The 5 day cycle projection is 5750, almost done. But the last low, a key spport line now at 5762 looms. If they take that out, this could get really hairy. I think maybe there aren't enough shorts out there to buy a breakdown if it comes. For what it's worth, the 4 hour bars give a little perspective on the magnitude of this "top" which may or may not turn out to be just a consolidation. If it's a top, then the chart pick list gonna get a good ass kickin. Picking a Few Nickels With Steamroller Still Coming But as you can see, in addition to being the 5 day cycle projection, the 5750 area is also a spport line of some significato. Might be an offer the bulls can't refuse. Meanwhile, over in the bond market, how much you wanna bet that this crash in the Treasuries is leaving some bad cases of brown pants syndrome amongst bond traders. The 10 year yield cycle oscillators show signs of a short term top in yields here, but so far, there's been no giveback. That means that prices remain near their lows, pressuring even hedged long positions in the futures carry trade. Considering the angle and speed of this move, it may look smooth but it doesn't feel smooth coming out of bond portfolios as the market becomes less and less liquid. Liquidity Measures Show Markets Stretched to the Limit October 21, 2024 And gold just keeps on keepin on. Gold Approaches Its Long Term Target And Cryptonians wait with bated breath for their hero to break out of this base to a measured move target of 90k. While Americans living in Europe wait for their next opportunity to buy low. For moron the markets see: Swing Trade Screen Picks – Picking a Few Nickels With Steamroller Still Coming October 29, 2024 Market Broke for Second Wind October 27, 2024 Gold Approaches Its Long Term Target October 26, 2024 Liquidity Measures Show Markets Stretched to the Limit October 21, 2024 Get Your Red Hots Here October 3, 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.
DrStool Posted October 31 Author Report Posted October 31 The Fed's Strategic QE Reserve Slush Fund is hovering just above $200 billion. It's not clear that it has leveled out yet, but with all the T-bills issued in since the beginning of October, it is clear that most of that issuance is being funded by A- selling bonds, and B- repo. The RRP slush fund is close to effective zero, and that ain't bullish. Liquidity Measures Show Markets Stretched to the Limit
DrStool Posted October 31 Author Report Posted October 31 Here's the 2 hour bar perspective. Appears to be likely place for pivot. But if not LTFO. Market Broke for Second Wind
DrStool Posted October 31 Author Report Posted October 31 This top breakdown has a conventional measured move target of 5680.
DrStool Posted October 31 Author Report Posted October 31 Primary Dealer Crisis Now, Crisis Later Lee Adler 1 - Liquidity Trader- Money Trends October 31, 2024 Primary Dealers were wrong about the Treasury market in September, and it has cost them. They reached a small net long position in their hedged bond accounts just as the bond market was topping out in price terms. Since then, bonds have gotten crushed and yields have soared. The dealers aren’t net short enough to profit. Non-subscribers, click here for access. Subscribers, click here to download the report. We had recognized the potential for a turn in the last report on dealer positions. 9/11/24- Technically Treasuries are near an important inflection point on the charts. Repo shows extended leverage among dealers. They are slightly short overall, which isn’t bullish for the big picture. They are leveraged to the hilt and they’re taking hits. There’s no information to suggest that the young downtrend in bond prices and uptrend in yields will reverse anytime soon. A bullish turn may need to await the reimposition of the debt ceiling in early January of next year. That’s because if the Treasury follows past practice, when the debt ceiling is imposed, the Treasury will pay down T-bills. That puts cash back into dealer and investor accounts, enabling them to absorb Treasury coupon supply, and to buy stocks at the margin. But until then, there doesn’t appear to be a catalyst in this data to cause a reversal in the bearish environment for bonds. I had worried about that being a catalyst for contagion into stocks, and we may have gotten our first dose of that today (October 31) with the S&P 500 dropping 108 points. It looks as though the period from now until the beginning of 2025 will be a time of xxxxxx xxxxxx. We had a xxx xxxxx xxxxxx today. This suggests that it’s time to xxxxxx xxxxxxx xxxxxxxx xxxxxxxxx. I will look for those setups and report on them as they arise in the swing trade stock screens. 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!
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