Saturday, February 24, 2018

#DebtCrisis Gaining Momentum In Periphery Economies

News
The trend of rising interest rates is cyclical. The Fed, politicians, or bond experts can't stop it, because like us they're just spectators. The trend, in general, will be orderly most of the time, but there will be bouts of volatility and panic as a world addicted to debt is forced to adjust (chart 1-3). It's always been this way, so don't listen to "modern society is screwed up" interpretation; it's no more so that any other time in history. If we actual taught history, not some perverted version that preps for AP exams or the ACT test (prep exams), the linkage would crystal clear for younger generations. Written history, yes books still exist, suggests history is repeating all over again as Yogi would say. People pushing this time is different are either dangerously under educated or have agendas. It's human behavior, or sorry to say for men, at least a male-centric human behavior. Perhaps a society run by women, or balance by proper cross-section of society, yield different outcomes, but that's difficult debate to have based on historical facts. Men have been in charge for thousands of years with far too many dumb-ass alpha males crumbling dynasties and empires. Today's reshaping of politics is an indirect recognition of the representation problem. Humans just want to live their lives and make their own choices under a backdrop of peace and tranquility.

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Headline: Italian bonds set for worst week of year as election looms

Italy's 10-year government bond yield was poised on Friday for its biggest weekly rise of the year so far, reflecting growing unease about a national election, just around the corner, that is expected to result in a hung parliament.

Italian bond markets have proved resilient in the run-up to the March 4 election thanks to a stronger euro zone economy, a ratings upgrade, a fall in risks of a euro-zone break-up and a toning down of anti-euro rhetoric from populist parties.


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Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.

Thursday, February 22, 2018

US Economic Activity Composite Review #EAC

EAC
US stocks and economy are not strong! The headlines will only consider that after stocks retest or break the February lows. A retest of break of the lows is more than a remote possibility. Russell 2000, a small cap indices, has been been leading the market lower for 12 weeks. Few other than the PREV Matrix will will discuss this trend. Why does this matter? Small caps are extra sensitive to the domestic economy that the politicians and entertainment only headlines keep reminding us will only get better as the tax cuts kick in.  Perhaps. Economic Activity Composite (EAC), an unbiased predictor of economic growth, says the opposite.

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Chart


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Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.

Wednesday, February 21, 2018

US Treasury #Bonds Review $TLT

US TBonds Review
Those that view the message of the market on daily basis are likely confused by trading noise. While trading noise contributes to the long-term trends, it does not define them. Human behavior tries to explain trading noise as a meaningful trend. This confuses the majority which, in turn, contributes to their role as bagholders of trend transitions.

US Treasury Bond's overall trend, revealed by trends of price, leverage, and time, are defined in the The Matrix for subscribers.

Subscriber Comments

US Treasury bonds have been steadily approaching triple downside alignment for weeks. US 10-Year bonds, the leader of the group, has been Triple aligned down since 1/1/2018. Have no doubt, the bears control the trend and profits until these trends reverse or expire from age. Bullish bond narratives are delusional and dangerous.

Bonds are vulnerable as long as triple alignment is maintained. The 10-year is leading the sector lower. While the 10-year's cycle of TIME (BrST > 3) favors consolidation over the short-term, it defines a relatively young trend that could easily defy bullish expectations by maintaining a backdrop of rising rates for most of 2018. This outcome could easily derail consumer spending and real estate, and might be the reason why the Economic Activity Composite (EAC), regardless of Republican tax cuts, favors a near-term contraction rather than expansion. These trends are revealed in PREV Matrix.

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Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.

Monday, February 19, 2018

Gold Review $GLD

Gold Review
Those that view the message of the market on daily basis are likely confused by trading noise. While trading noise contributes to the long-term trends, it does not define them. Human behavior tries to explain trading noise as a meaningful trend. This confuses the majority which, in turn, contributes to their role as bagholders of trend transitions.

Gold's overall trend, revealed by trends of price, leverage, and time, are defined in the The Matrix for subscribers.

Subscriber Comments

Gold and silver, to the dismay of the bulls, has struggled to rally amid equity weakness. How can this be? The tape, a trend driven by the intentions of the invisible hand, says it's not ready. The precious metals composite (PMC) has been bearish since 4/14/17 (chart 1). Gold, silver, and the gold shares will disappoint the bulls until it reverses (turns positive).

Gold's trend, a function of confidence, could be kicked hard to the downside with an upside breakout of confidence (chart 2). This risk is real and could easily unfold in 2018, due to the close proximity of CE to 91. Independence of thought and discipline is important here. Although the gold bugs are likely screaming buy early in 2018, their dedication to the cause blinds them of key trends urging caution.

Chart 1


Chart 2


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Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.

#Bitcoin Review $GBTC

Bitcoin Review
Those that view the message of the market on daily basis are likely confused by trading noise. While trading noise contributes to the long-term trends, it does not define them. Human behavior tries to explain trading noise as a meaningful trend. This confuses the majority which, in turn, contributes to their role as bagholders of trend transitions.

Bitcoin's overall trend, revealed by trends of price, leverage, and time, are defined and discussed in the The Matrix for subscribers.

Subscriber Comments

GBTC, an equity proxy for Bitcoin, transition from downside alignment to consolidation (misalignment) on 2/15. Extreme readings in the cycle of TIME prior to 2/15 made this trend transition an expected outcome. See PREV Matrix

Those that reduced risk or shorted in early January should have covered their shorts as the cycle of TIME (BrST) pushed above 2. Previous comments that "holding aggressive and profitable positions past the cycle of TIME is foolish" appears to be proven correct again.

Now the trend is compressing, a precursor of change towards upside alignment. Daily upside alignment will mark the return of TRIPLE UPSIDE ALIGNMENT and pain for bears unable or unwilling to read the tape.


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Chart 1: GBTC Tertiary Trend


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Sunday, February 18, 2018

#Matrix Update $SPY $TLT $GLD $SLV $UUP $FXE

The Matrix
The PREV (the Matrix), an array that display the message of price, volume, leverage, and time, helps subscribers recognize buying and selling opportunities to buy or sell commodities, US treasury bonds, foreign exchange markets, and domestic and international equity markets.

The Matrix has been redesigned to display not only leverage (DI) but also price and volume alignment.

Gain access to the message of the market to trade like a professional today.

If PREV (Matrix) returns to regular publication, the new format will display the tertiary, secondary, primary trends together. The computer's output has been reprogrammed to scan for triple (Trip UP or DOWN) and double (Dbl UP or DOWN) alignment, the more profitable setups in tape reading. Setups are graded 1, 2, 3. Grade 1, usually under triple alignment lead by the primary trend, are generally the most desirable.

Subscription will be $150 to $300 for the full year. Subscriptions costs for new subscribers will be reduced on a sliding scale as the year progresses. Review the new format at your convenience. Please CONTACT US with comments, suggestions, and subscription intentions. The PREV will not be reintroduced if interest is low.

PREV (the Matrix)

Insights is a forum that uses the markets as the ultimate teacher and provides unique perspective on capital market, economic, and geopolitical trends.

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Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.

#VIX Review $VXX

VIX Review
Those that view the message of the market on daily basis are likely confused by trading noise. While trading noise contributes to the long-term trends, it does not define them. Human behavior tries to explain trading noise as a meaningful trend. This confuses the majority which, in turn, contributes to their role as bagholders of trend transitions.

VIX's overall trend, revealed by trends of price, leverage, and time, are defined and discussed in the The Matrix for subscribers.

Subscriber Comments

Experts, largely following opinion, have been talking US stocks up or down for months. The TAPE or message of the market is the only opinion that matters.

The VIX fell out of triple alignment when the daily trend entered consolidation on 1/16/18, a misalignment of price and volume. Misalignment entered upside alignment on 1/25. I wrote about the transition in January, saying the majority, blinded by the relentless rally and ego, would miss the it and not reduce risk.

Upside alignment, a trend that depicts rising volatility, fear, and lower stock prices, has not subsided. While upside alignment has yet to spread to the secondary (weekly) and primary (monthly) trends, it's inflicted heavy damaged to the trend over the short-term. Downward deterioration of the term structure within the VIX futures market highlights the damage. A bearish crossover generated week ending 2/16 favors continuation of the correction that will likely transition to the secondary trend (chart 1).

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Chart 1: Week Ending 2/16


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Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.