ES - 4441
Updated
The S&P 500 has flipped back to Bullish for the Short Duration Timeframes.
From a Weekly perspective, it remains in Negative Territory. OSC's remain well
below respecting the 3 and 4X divergences which built over months.
As Price traded down the lower Channel Boundary for the Downtrend on its third
test of Support volumes began to wane, although Money Flow continued to remain
deeply negative on the Weekly TF.
We anticipated a Counter-trend and indicated it would be complex and require time
to develop in order to determine how far it would return.
4441 was an obvious over-throw level on the DOM as there was widespread panic
participation there repeatedly - once it cleared and closed above - 4481/83 - 4500
became the Price Extension Objectives.
The ES dropped close to 300 handles from its ATH to Low. An impressive move in
relatively short order. Participants here waited patiently for this Larger Trade to
develop - it took several months from when we began pointing out the divergences
were immense.
Patience and resolve into Positioning for it required a healthy degree of the same
as waiting on the Inflation Transition to begin its challenge to Yields required even
more patience and resolve.
The NET result, once ROCs in 10Yr Note Yields began to reverse and build ROC, the
decline was ON - everyone who followed the trade... did very well.
Our bias on Capital was Futures, but an aggressive 15.2% Position in Bonds was deployed
as well, namely ZB ZN TLT in conjunction with NQ TQQQ ES SPXL YM MNQ MES MYM
and several others.
As it became clear the Trade was going to reverse, we entered Buy To Opens on greatly
reduced size @ .125X and .250X capturing percentages of each retrace, these were
trades... they are not Positions, regardless of the Scope and Scale of this retracement
as we Yield Risk remains extraordinarily HIGH.
We indicated the next Lower low for the ES would arrive in the 4140 to 4190 Range once
this counter-trend completes. Indicating the 1.645 to 1.71 / 1.76 level for the 10Yr Yield
would be the Trigger - Presently @ 1.574.
Many Traders are now calling the "Bottom" - we simply believe it is far too early to
assume such.
I've seen 18K - 21K "Calls" for the NQ, 5K - 6.6K for the ES.
"Calls" is correct, they are simply this and nothing more, WAGs of degenerate proportions.
Can they trade?
Anything is Possible in a Liquidity Fueled Market.
Is it Probable?
No, IMHO, 4/5 is incomplete.
Could I be proven wrong, Yes, absolutely.
For the PRESENT, with Yields @ RISK, the VX CURVE @ LOWS filling the Daily Gap and the
VXN approaching LOWS... PROBABILITY is on my side, not the BULlS, BTD DG's, and "CALLERS"
We remain at the beginning of EPS for Q3, the numbers with few exceptions (FInancials)
are dismal. AAPL- Toyota and a great many MultiNationals have provided insights as to
Future Guidance and clear Guidance to far lower expectations.
The Global Economy is contracting.
The BULLs insist this exactly when you Buy the Dip as the Federal Reserve is all in to
support the Equity Complex...
Are they though?
Of course, they are NOT. They have openly announced a reduction in Bond / MBS purchases
@ $15 Billion per month, beginning in November. At this rate, it implies the Taper will last
8 Months or out to the Summer of 2022.
The ONLY question is does this begin November 3rd or the 21st.
We believe they will be far more aggressive in the Taper, @ $20 to $25 Billion per month.
They have no intention of letting this Taper drag on, it will be the shortest in history as
they now need to appear vigilant in fighting an Inflation which has proven to be - not at
all Transitory.
The FED will ACT, make no mistake regarding their intent, regardless of how cluttered their
FOMC statement was filled with mixed metaphors.
Bonds will force their hands out the curve, which implies a flattening to inversion of the
Yield Curve Longer Durations.
2022 is going to be a complete MESS.
Confidence is at lower lows than the Corona Virus Lows, another clear divergence. To the
BULLs this apparently suggests the Bottom is IN.
Here in our little corner of the Trading Universe - it suggests something altogether different.
AS for Price within the Equity Complex, it has been sloppy at best. A difficult environment as
Volatility will begin to assert itself as we move to Settle the VIX this coming week.
Where specifically and how high can Price return... again this will depend on 10Yr Yields, it
will most closely correlate to It and the VX Complex.
Our Larger Objectives remain the 200SMAs, for Price to invalidate this - it would require turning
Weekly charts which are in extreme Negative territory, and even then... We sincerely doubt it
would hold for very long given the enormity of the real Headwinds accumulated.
As this concludes, we will be re-entering Positional SELLS for the lower-Price Objectives well
below.
What turns this... there are 1000s of Vectors at this time.
We will see, until then we remain patient, vigilant and most of all - opportunistic.
Trade accordingly - as this develops we will continue to update our Indications.
The only answer is Price, we simply Obey.
4/5 is incomplete IMHO, 5/5 will be amazing in its Price efforts.
From a Weekly perspective, it remains in Negative Territory. OSC's remain well
below respecting the 3 and 4X divergences which built over months.
As Price traded down the lower Channel Boundary for the Downtrend on its third
test of Support volumes began to wane, although Money Flow continued to remain
deeply negative on the Weekly TF.
We anticipated a Counter-trend and indicated it would be complex and require time
to develop in order to determine how far it would return.
4441 was an obvious over-throw level on the DOM as there was widespread panic
participation there repeatedly - once it cleared and closed above - 4481/83 - 4500
became the Price Extension Objectives.
The ES dropped close to 300 handles from its ATH to Low. An impressive move in
relatively short order. Participants here waited patiently for this Larger Trade to
develop - it took several months from when we began pointing out the divergences
were immense.
Patience and resolve into Positioning for it required a healthy degree of the same
as waiting on the Inflation Transition to begin its challenge to Yields required even
more patience and resolve.
The NET result, once ROCs in 10Yr Note Yields began to reverse and build ROC, the
decline was ON - everyone who followed the trade... did very well.
Our bias on Capital was Futures, but an aggressive 15.2% Position in Bonds was deployed
as well, namely ZB ZN TLT in conjunction with NQ TQQQ ES SPXL YM MNQ MES MYM
and several others.
As it became clear the Trade was going to reverse, we entered Buy To Opens on greatly
reduced size @ .125X and .250X capturing percentages of each retrace, these were
trades... they are not Positions, regardless of the Scope and Scale of this retracement
as we Yield Risk remains extraordinarily HIGH.
We indicated the next Lower low for the ES would arrive in the 4140 to 4190 Range once
this counter-trend completes. Indicating the 1.645 to 1.71 / 1.76 level for the 10Yr Yield
would be the Trigger - Presently @ 1.574.
Many Traders are now calling the "Bottom" - we simply believe it is far too early to
assume such.
I've seen 18K - 21K "Calls" for the NQ, 5K - 6.6K for the ES.
"Calls" is correct, they are simply this and nothing more, WAGs of degenerate proportions.
Can they trade?
Anything is Possible in a Liquidity Fueled Market.
Is it Probable?
No, IMHO, 4/5 is incomplete.
Could I be proven wrong, Yes, absolutely.
For the PRESENT, with Yields @ RISK, the VX CURVE @ LOWS filling the Daily Gap and the
VXN approaching LOWS... PROBABILITY is on my side, not the BULlS, BTD DG's, and "CALLERS"
We remain at the beginning of EPS for Q3, the numbers with few exceptions (FInancials)
are dismal. AAPL- Toyota and a great many MultiNationals have provided insights as to
Future Guidance and clear Guidance to far lower expectations.
The Global Economy is contracting.
The BULLs insist this exactly when you Buy the Dip as the Federal Reserve is all in to
support the Equity Complex...
Are they though?
Of course, they are NOT. They have openly announced a reduction in Bond / MBS purchases
@ $15 Billion per month, beginning in November. At this rate, it implies the Taper will last
8 Months or out to the Summer of 2022.
The ONLY question is does this begin November 3rd or the 21st.
We believe they will be far more aggressive in the Taper, @ $20 to $25 Billion per month.
They have no intention of letting this Taper drag on, it will be the shortest in history as
they now need to appear vigilant in fighting an Inflation which has proven to be - not at
all Transitory.
The FED will ACT, make no mistake regarding their intent, regardless of how cluttered their
FOMC statement was filled with mixed metaphors.
Bonds will force their hands out the curve, which implies a flattening to inversion of the
Yield Curve Longer Durations.
2022 is going to be a complete MESS.
Confidence is at lower lows than the Corona Virus Lows, another clear divergence. To the
BULLs this apparently suggests the Bottom is IN.
Here in our little corner of the Trading Universe - it suggests something altogether different.
AS for Price within the Equity Complex, it has been sloppy at best. A difficult environment as
Volatility will begin to assert itself as we move to Settle the VIX this coming week.
Where specifically and how high can Price return... again this will depend on 10Yr Yields, it
will most closely correlate to It and the VX Complex.
Our Larger Objectives remain the 200SMAs, for Price to invalidate this - it would require turning
Weekly charts which are in extreme Negative territory, and even then... We sincerely doubt it
would hold for very long given the enormity of the real Headwinds accumulated.
As this concludes, we will be re-entering Positional SELLS for the lower-Price Objectives well
below.
What turns this... there are 1000s of Vectors at this time.
We will see, until then we remain patient, vigilant and most of all - opportunistic.
Trade accordingly - as this develops we will continue to update our Indications.
The only answer is Price, we simply Obey.
4/5 is incomplete IMHO, 5/5 will be amazing in its Price efforts.
Note
Margin Debt now stands @ 408$Note
408% = Margin Debt, a Higher Hogh after the recent correction.
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