Category Archives: Interest

StealthFlation Defined………………by BDI

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Dollars funnel.

StealthFlation:

An intractable economic condition that inevitably arises as unlimited units of currency compulsively pursue nonproductive wealth assets in a grossly over-leveraged economy which has been artificially reflated in a desperate and misguided attempt by monetary authorities to synthetically engineer growth via extreme monetization.   Preventing the real economy on the ground from seeking the healthy normalization and natural balance of free market forces necessary for genuine productive economic growth. (more…)

Buy Signals Triggered

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The long setup I was looking at on Friday morning triggered on Friday so the daily lower band ride should be over and I’m looking at upside targets. The main target I’m watching is not an SPX level but the 70 level on the daily RSI 5. The RSI 5 closed on Friday at 47, and I’d expect to see a rally of at absolute minimum to the 50 DMA to make this target. Of the last seventeen of these from the start of 2007, only three retested the lows before making my RSI 5 target at 70, and two failed in the 60 area before going on to new lows. This is a strong buy signal. SPX daily vs RSI 5 & NYMO:

140811 SPX Daily vs NYMO and RSI 5

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Leaning Long

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SPX broke back above the daily lower band yesterday and delivered a 27 point bounce from the lows, before giving much of that back overnight. There are arguments both ways for direction today. The arguments for the short side are that the 60min RSI 14 reached 50, which is a natural reversal level and the obvious level to reverse at to deliver positive RSI divergence at a retest of the lows. The falling channel on RUT also argues for a test of the lows next. I have two bull/bear levels that I’ll be watching today carefully in regular trading hours (RTH) and those are the 1925 ES level (1930 SPX area) at the ES 50 hour MA, and the SPX daily lower band at 1934. (more…)

Other Markets Update

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This is my vacation post for other (non-equities) markets. For equities check my last post from earlier today. Normal service resumes next Monday 4th August.

Last time I was looking at EURUSD I said that I was expecting a test of rising wedge support in the 1.35 area. EURUSD made that and then slightly lower to test the 200 DMA, so the rising wedge is now broken. Unless we see a fairly fast recovery to new highs I’m now looking at targets for EURUSD in the mid-120s. I’ve been watching this setup for months in the expectation that there should be a strong USD rally at the end of QE3 so I’m expecting this to resolve down. EURUSD weekly chart:

140728 EURUSD Weekly Rising Wedge and Triangle

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