Tuesday, 11 December 2018
Friday, 7 December 2018
Tuesday, 6 February 2018
Friday, 2 February 2018
MarketMap 2018 update
Through all the channels I listen to there is an overwhelming consensus that we are in a new secular bull market and there are no signs of a top and the market is virtually without risk.
The pundits hang their hat on the A/D line which is in gear and until it divergence the market is going higher. I mentioned this in the big issue newsletter. They also love the monthly RSI at a historical high of 85.
More recently the social media types off wall street look at ADX at 50 to infer the trend dynamics are higher. However, these extremely high levels above 50 by ADX when seen in a panic context, the 50 ADX is at a COT; the bull run since November 8, 2018, is a panic, emotionally “I can not afford to miss the move.”
What is critical here is the "off the chart" sentiment attending to the Trump's bull market. Extreme opinions shared widely on social media and financial news channels constitute the single most reliable indicator of an impending change of direction for an exchange.
One measure of this "SPECULATIVE INTENSITY" already peaked December 17,2018. BitCoin from that date has lost 40% plus.
Our CMT friend and associate Bob Prechter point to another measure of “speculative intensity" TMtraders can use it as a sign of a change of the trend is near. The indication is the widening of the gap between the yield of junk bonds and yield US of Treasury bonds of similar maturities. When the spread widens, it is a reflection of the market without risk management considerations - signs of a change of a trend for stocks.
As you can see in our Early Table, the market is in a cluster of time windows likely to lead to a high pivot price, confirmed by a sizable decline %5 plus – established by our big swing (multi-month) systems sell (taking profits) and sell short signals before the end of the month.
MarketMap™2018 Issue #1
Financial crises are precipitated
they are not random events
As recent as 2016 major pessimistic headlines have bombarded the public. Such media spin on the financial markets keeps a lid on public participation. Especially that segment of the populace that has been disenfranchised from owning stocks.
However, the negative headlines all changed on November 8, 2016, coincidental with the “surprise” Trump election. Since that date, the market outlook has changed from one of gridlock, which the market liked as it meant nothing gets done and Wall Street liked the status quo. Now with a laissez-faire President that will sign anything the Republican majority want for fiscal policy, well Wall Street is in love.
However, the initiated knows this has precedents and bear markets are something expected every several years, especially in this era of deregulated markets and corporatocracy.
The initiated knows, most boom and busts, if not all, that have plagued the American economy were generated by government creating a boom through easy excessive fiscal or monetary policy, which was soon followed by the inevitable bust, i.e., the inevitable taking of profits.