The Trendline Mattered

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Since the federal government, which has wholly perverted worldwide equity markets, decided to directly intervene last Christmas, the ES has added over 600 points, like so:

upupup

The basis for this rise – – over and over again, so often that it became a running joke – – was Trade Talk Optimism. More specifically, repeated assurances that (sigh) “Trade talks are going well.” If you don’t believe me:

bullshit

Now that trade talks how been blown to pieces, an organic, rational, price-discovering market would have us limit-down for the next few days in equities. But, nope, we’re down about 1.5% at the moment, having greatly stabilized from overnight lows. Big fuckin’ deal.

Anyway, I had pointed out a week ago that there was a trendline break in the ES:

trendbreak

…..and that support had now become resistance…..

resists

……and someone here sneered how trendlines could be drawn ANYWHERE to make a given point. Well, no. My trendlines are drawn with precision and anchored with decades of experience doing this stuff, so they actually DO matter.

Sometimes it’s just hard to know why, or to what degree. But our little linear friend basically predicted up was turning to down.