DrStool Posted January 15 Report Posted January 15 SPROING! Let's go to Alvin and the Chat Monks for his reaction. I'll merely add that the 5 day cycle projection is 5950. Alvin: The release of the December 2024 Consumer Price Index (CPI) highlights an increase of 0.4% on a seasonally adjusted basis, marking a slight acceleration from November's 0.3%. Notably, energy prices surged 2.6%, contributing significantly to the monthly rise, with gasoline spiking 4.4%. Food prices rose moderately by 0.3%, while core inflation (excluding food and energy) advanced by 0.2%, showing signs of stability compared to prior months. Key Market Reaction Observations: Chart Analysis: The ES futures chart shows a decisive bullish breakout coinciding with the CPI release. This reflects a strong market reaction, likely driven by the perception that inflation remains under control, reducing the urgency for aggressive Federal Reserve rate hikes. The price sharply broke above several resistance levels, supported by heavy buying momentum. The alignment of technical factors (such as moving averages and prior resistance zones) adds credibility to this rally. Momentum Indicators: Indicators at the bottom of the chart, like the MACD and True Strength Index, are showing sharp upward movement, indicating strong positive momentum. However, the rapid ascent suggests overbought conditions may emerge shortly. Contextual Factors: While energy and gasoline prices contributed to the CPI increase, the moderation in core inflation might be viewed positively by the market, easing concerns about tighter monetary policy. Implications: Short-Term Outlook: The breakout above prior resistance zones may fuel continued bullish momentum in the near term. Traders will watch for follow-through buying or potential consolidation at higher levels. Mid-Term Caution: Despite the bullish response, energy price volatility and rising shelter costs could reignite inflationary concerns. This might cap the rally if economic data doesn't confirm a continued cooling of core inflation. Market Strategy: Bulls may find opportunities by riding this momentum, focusing on support from prior resistance levels to manage risk. Bears could watch for signs of exhaustion in the rally, especially if the price fails to sustain above key breakout levels. This market response reflects a balancing act between optimism around moderating inflation and caution about potential risks in energy-driven inflation spikes. As always, sustained price action in subsequent sessions will be critical for confirming the broader trend. Moron the markets: Primary Dealer Stress: Big Risks Delayed, Not Denied, in the Treasury and Equity Markets January 15, 2025 S&P 500’s Critical Crossroads: What Lies Ahead for the Markets? January 13, 2025 Top Swing Trade Picks & Market Insights: Gold, Footwear, and Short-Sale Opportunities – Jan 12, 2025 Gold’s New Year Momentum: Is a Breakout on the Horizon January 10, 2025 Macro Liquidity Trends: Insights on Repo, Treasury Actions, and Market Dynamics January 10, 2025 Withholding Taxes Surge – Could This Signal a Market Breakout? January 7, 2025 Is Gold Approaching a Critical Turning Point? January 2, 2025 Liquidity Trends and Stock Market Insights – Is a Bear Market Imminent? | Download Full Report December 24, 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 Be sure to respond to the confirmation email which is sent instantly. If not in your inbox, check your spam folder.
DrStool Posted January 15 Author Report Posted January 15 Navigating Market Risks: Insights from Primary Dealer Positions – January 2025 Lee Adler Lee's Free Thinking January 15, 2025 Dive into the latest analysis of primary dealer positions and their implications for Treasury and equity markets in 2025. This exclusive report uncovers critical trends in dealer financing, leverage, and hedging strategies, with a focus on key metrics like repo financing volatility and the debt ceiling’s impact on market liquidity. Discover why systemic leverage is growing and how this might influence the timing of the next bear market. Highlights include: Rising Dealer Leverage: Learn about the risks from record-high fixed-income inventories and imperfect hedges. Repo Market Instability: Explore how wild fluctuations in repo financing could signal deeper systemic issues. Market Outlook: Understand why technical indicators suggest a potential top formation in stocks and bonds. Debt Ceiling Implications: Find out how the government’s cash management strategies could delay market disruptions. Want the full breakdown of actionable insights and critical signals to watch? Subscribe now to Liquidity Trader for comprehensive analysis and guidance. 👉 Get Lee Adler’s Liquidity Trader Delivered Instantly Subscribers, click here to download the report.
DrStool Posted January 15 Author Report Posted January 15 Reverse head and shoulders that I mentioned yesterday, breakout measures to 5965.
DrStool Posted January 15 Author Report Posted January 15 Been a while since the market gave the finger.
DrStool Posted January 15 Author Report Posted January 15 Alvin? Looking at the hourly chart of the ES (E-mini S&P 500 Futures) and interpreting the setup: Current Context Trend Reversal and Momentum: The breakout from the red bearish channel into the green bullish channel suggests that momentum has shifted upward. The MACD histogram and signal line appear bullish, which supports this momentum. Fisher Transform and True Strength Indicator (TSI) are also signaling potential strength. Key Resistance Levels: The 5940 area seems to be a critical resistance level. The market will need strong momentum to push through this level. Beyond 5940, the next resistance cluster appears near 5960–5980 (based on the confluence of horizontal red levels). Support Levels: The 5908 level is an important support, as it aligns with the breakout zone. Further below, the lower green channel boundary (~5880–5890) provides additional support. Price Action: Recent upward movement within the green channel indicates intraday bullishness. However, consolidation or a slight pullback toward 5908 could occur before further upside. Outlook for the Rest of the Day Bullish Case: If the price holds above 5908 and the momentum indicators remain positive, a test of 5940 seems likely. Breaking 5940 with strong volume could trigger a run toward 5960–5980, aligning with the upper boundary of the green channel. Neutral/Sideways Case: A rejection at 5940 would likely lead to a consolidation phase, with the price oscillating between 5908 and 5940. This would indicate indecision and could result in a tighter trading range going into the close. Bearish Case: If the price loses 5908, a pullback toward 5880–5890 is probable. Breaking below this area would invalidate the bullish breakout and reintroduce bearish momentum, potentially testing lower support near 5855–5860. Strategy Recommendations For Long Trades: Consider long positions on pullbacks to 5908, with tight stops below 5900. Target 5940 initially, with a secondary target near 5960 if bullish momentum continues. For Short Trades: Look for rejection at 5940 for short-term shorts, targeting 5908. A break below 5908 opens the door to testing the 5880–5890 range. Caution Points: Watch the momentum indicators closely. If MACD or Fisher starts diverging while price approaches resistance, it could signal weakening bullish momentum. Be mindful of broader market catalysts (e.g., economic data releases or geopolitical events) that could cause sharp moves.
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