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When Nixon took us off the gold standard, it represented the high water mark for the Middle Class. Basically this is when the government and the banks lost all restrictions on money creation. Well we see the results. Deflation is good for the people, inflation for TPTB. Now you know why we have 2% inflation targets.
Ever since the Fed quit QE, the market has been oscillating based on OPEX. Many sites have been remarking on this as of late (so probably will not work this month) but technical patterns, seasonal s, and trend-lines suggest we take the trade short. Also, it looks likely that the market has readjusted back to levels prior to the we are going to raise rates meeting. Now what, back into the old rectangle, or as I think we are now in this new lower rectangle.
I am short ES and Biotech, but there are many ways to play this whether you are a conservative or aggressive trader.
I consider myself an observer. I am hyper-ly aware of the world around me, and for the longest time people in general have not had the same alarm I feel for some time about our Country, future, and world. I always tell my family things don’t matter to people until it does. Then things happen fast.
That Nexus has arrived. The trigger, in my opinion was when Trump touched the third rail of politics and took on the immigration lobby and found out the electricity wasn’t on, and then in prime time took down the Doyenne of the Media right, in the most vile way, and people cheered, on both sides.
The reason, in my opinion people are sick and tired of being sick and tired. They are tired of politicians telling them the things they are mandating for them are good for them (the people) when it is a clear as day it is for the benefit of them (the elites).
If you believe as I do that the governments of the world have shot their load, and for whatever reason (politically, economically, or culturally) can’t keep expanding their debt loads, means one thing.
EXETER Pyramid is activated.
My preferred time frame to check market direction is the four chart. I attached a chart for your reference. Also I only care about momentum, and trendlines to guide me.
As you can see, this gives me a good framework to determine my bullish or bearish leanings.
Yesterday and today, I was watching for a bearish swing after the 2100 area failed, and with momentum receding. We got it, in spades. I then extended the trendlines to let me know when to abandon this bearish tilt, and watched as the market traded up to the downtrend line, and failed, and momentum rolled over at the same time a four hour crossed over, and went short.
I then covered expecting a end of the day ramp, so traded on the five minute signal, and saw that momentum was waning and went short again, right at the close, (79.50).
That is just a preamble for the set up. Now that we failed, I will now watch for the bottom trendline for a failure of that trendline. I am reasonably confident it will fail, as when momentum goes below 20, it gets stuck on sold until momentum fights back above. My view is we are going to test support at the August low. Then will watch the July low.
My mind changes at a move above 20 on momentum, and / or a break above the upper trendline.
I keep it as simple as this. Enjoy.
