Brave New World 11/6/24

[DrStool]

Based on the actions of traders and their algorithms overnight, the new regime will be bullish for stocks and crypto, and bearish for gold and the bond market. We'll see how that goes. Although my swing trade stock screen algorithm flashed a ton of buy signals last week. So there's that.  Swing Trade Screen Picks – Treading Water

As of 5 AM ET, the ES 24 hour S&P futures hourly chart projected a 4 day cycle projection of 5925. That's been hit. There's also some minor trend resistance up around that area. 

So now let's see if there are second thoughts about all this bull movement. Major Inflection Point

Here's the daily bars on the 10 year Treasury yield. Don’t Be Misled By October Tax Collections Collapse

Old Gold Uptrend Could Get Smoked

BTC breakout on hold. If cleared, it would measure to 90k.

The euro is getting smoked. Discounting the rebuilding of the Russian army and its return to Warsaw and Berlin, and who knows, Frankfurt, Brussels and Paris. The new US regime has already said that the Russians can do whatever the hell they want.  Oh boy. I'll have a front row seat. Should be fun. 

And lest we forget,   

14 hours ago, DrStool said:

Fed's Deferred QE Slush fund Stash heads for Zero Day Exploit. Primary Dealer Crisis Now, Crisis Later 

 

 

For moron the markets see:

• Don’t Be Misled By October Tax Collections Collapse November 5, 2024
• Swing Trade Screen Picks – Treading Water November 5, 2024
• Major Inflection Point November 4, 2024
• Old Gold Uptrend Could Get Smoked November 4, 2024
• Primary Dealer Crisis Now, Crisis Later October 31, 2024
• Liquidity Measures Show Markets Stretched to the Limit October 21, 2024

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[Jorma]

A distinct lack of substantiation from Treasury Coupon Land. Why do I have this overwhelming feeling that substantiation is on the way?

[DrStool]

Let's look at the 2 hour bars on the ES for a moment. This is a big high base breakout. It measures to 6040-6050. News driven moves aren't the most reliable harbingers, but I wouldn't ignore it. 

Yes, talking about today. 

[SiP]

Beautiful day, beautiful markets.

[Jorma]

"Discounting the rebuilding of the Russian army and its return to Warsaw and Berlin, and who knows, Frankfurt, Brussels and Paris."

I think your misapprehending the situation. It isn't to somehow occupy countries, it's to end Liberalism  End meaningful elections. Have one party states. Big Boss Putin can meet with Big Boss Trump and work things out.

What they are missing is nobody is going to want to work anymore. Not for bosses richer than God.

[potatohead]

Bank stocks in a massive squeeze. I guess they are perfectly hedged for the  back up in rates..

[SiP]

its the twenties. great moment to be alive and die before 2029

[SiP]

[DrStool]

2 hours ago, SiP said:

its the twenties. great moment to be alive and die before 2029

The problem is that politically this is 1933. Shortly after, Hitler took complete control, and aligned with Mussolini and Franco, while the Japanese began roiling the Far East.

I think there are striking parallels between that and Trump/Putin/Xi. 

In the stock market is already looking like the summer of 1929. 

So, no. I don't think we have 5 years. 

 

 

[DrStool]

Hard for me to understand how my swing trade screen algos were so strongly bullish based on the weak action of the last 3 days of last week. I looked at the results of the screens and said, this can't be right. Despite that, I liked 5 longs enough to add them to the list as of Tuesday morning. A list that already still had 11 longs despite last week's weakness. 

That's pretty good I think. But then I also added 3 shorts, because I was convinced that the bullish signal was not convincing. There had to be good shorts as well. So I chose 3. It will be interesting to see to what extent they buck this rally, if at all. 

Finally, the model has been amazingly consistent, if so unspectacular as to make me question whether its continuation has been worthwhile. 

Swing Trade Screen Picks – Treading Water 

[SiP]

2 hours ago, DrStool said:

The problem is that politically this is 1933. Shortly after, Hitler took complete control, and aligned with Mussolini and Franco, while the Japanese began roiling the Far East.

I think there are striking parallels between that and Trump/Putin/Xi. 

In the stock market is already looking like the summer of 1929. 

So, no. I don't think we have 5 years. 

 

 

Nah, Im not so much pessimistic. Trump is not Hitler. Who is he trying to invade?  US focus more and more on itself, closing itself on internal problems. Trump already said that he dont plan any wars. of course he is a convicted felony and liar but again, which country would he invade?

Putin - the same. His army was decimated in Ukraine. So Im not so much worrying about Putin. Probably there will be a deal to divide Ukraine like they did with Germany or Korea - east/west or north/south respectively.

Xi Jiping - Taiwan is the only place they want to invade. Nothing more. China never ever invaded other countries . They have too much problems.

Probably Taiwan will be invaded becase Trump will force them to do so. If Trump will impose huge tariffs (60-100%) then china will invade Taiwan to get the semiconductors.

Europe could have problems due to raising far right - There is a huge mess in Germany and huge mess in France. Potential mess in Spain (after floods). So in these three big EU countries we dont have stable governments.

UK is also a mess after brexit.

Its hard to be optimistic on the source of organic growth actually. Im not talking about fake growth like cutting the taxes etc. This will increase deficit and bond yield.

 

[DrStool]

I hope that you're right and it doesn't get as bad as I worry that it will. 

[SiP]

The market narrative behind these moves is as follows:

    Trump's policies will help US equities thanks to the announced deregulation of the economy and more fiscal spending; certain sectors are expected to benefit from the announcement of tariff increases. Tariffs, in turn, are bad news for other economies (e.g. Europe or China).
    Even larger budget deficits and the pro-inflationary effects of tariffs are expected to favour higher bond yields (and thus lower prices) in the US.
    Higher bond yields and the administration's protectionist stance are supposed to favour a stronger dollar, while at the same time this is supposedly bad news for gold.

This is the current narrative in the markets. Will these assumptions work out in practice? A glance at the stock market movements during President Trump's previous term in office (2016-2020) convinces us that the reality could prove to be much more complicated. For example, the first year of that presidency saw not a strengthening, but paradoxically a significant weakening of the dollar. Bond yields, on the other hand, fell rather than rose, the aftermath of a gradual economic slowdown and monetary easing, aided by notoriously higher tariffs.

[SiP]

dollar index and 10-year bond yield in first term in office (Trump)