Bear Flag or Channel Continuation?
Updated
Stocks are being panic bid here at the open, so it's another win for central banks and hence the billionaire class. Blue wave, red wave, green wave, or purple wave, it means nothing folks. The way I see it, both the dems and the republicans want the FED to keep crushing the dollar through persistent easing of monetary policy, which primarily increases the wealth gap, while encouraging the working class to go even deeper into debt. It's a mean trick, and for some reason everyone keeps begging for it. On the fiscal side, dems want more stimulus (debt), and higher taxes (why the headfake about taxing when the status quo is that they will continue to print?), while the republicans want less stimulus and lower taxes, (in other words, FED please keep increasing the wealth gap, but don't you dare raise taxes at all to spend our existing money). Either way it's a lose/lose for the working class/90% of us.
On the technical side, we're seeing either a bear flag/liquidity grab from the bears, or a reversal of the bearish sentiment/downtrend we observed at the beginning of the week. The 10Y yield is rallying hard today and for the first time since March 2020, we just crossed the 1% mark. Let's see how the roughly 15 Trillion in global negative yielding debt fears when they see that the US risk free rate is paying more than some corporate bonds. What if the bond market was about to crash, sparking a cascade of defaults across the corporate bond spectrum, where the majority of ratings sit at BBB-. Where would all that cash go? Probably not stocks, as they're mostly insanely overvalued, so maybe the best trade, notwithstanding the insane rally in crypto to date, is crypto itself. The sad thing is, Bitcoin is often used as a barometer of sentiment, and a hedge against inflation. So, if we saw a glimpse of deflation in markets, bitcoin would be down 50% similar to the crashes we saw at various times in the recent past.
I've said it before and I'll say it again, sometimes the only way to win is to not participate. It's time to start increasing that income, which must keep up with the inflation we're seeing in every corner of capital markets. Let's see how the day progresses, and best of luck out there! Thanks for your time today guys. If you enjoyed the analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. Cheers, Michael.
On the technical side, we're seeing either a bear flag/liquidity grab from the bears, or a reversal of the bearish sentiment/downtrend we observed at the beginning of the week. The 10Y yield is rallying hard today and for the first time since March 2020, we just crossed the 1% mark. Let's see how the roughly 15 Trillion in global negative yielding debt fears when they see that the US risk free rate is paying more than some corporate bonds. What if the bond market was about to crash, sparking a cascade of defaults across the corporate bond spectrum, where the majority of ratings sit at BBB-. Where would all that cash go? Probably not stocks, as they're mostly insanely overvalued, so maybe the best trade, notwithstanding the insane rally in crypto to date, is crypto itself. The sad thing is, Bitcoin is often used as a barometer of sentiment, and a hedge against inflation. So, if we saw a glimpse of deflation in markets, bitcoin would be down 50% similar to the crashes we saw at various times in the recent past.
I've said it before and I'll say it again, sometimes the only way to win is to not participate. It's time to start increasing that income, which must keep up with the inflation we're seeing in every corner of capital markets. Let's see how the day progresses, and best of luck out there! Thanks for your time today guys. If you enjoyed the analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. Cheers, Michael.
Note
Vix is getting absolutely hammered this morning. That's what investors get for trying to hedge risk appropriately: Note
The bulls easily recapture the channel, and are close to testing yesterday's high around 375: Note
Good look at the 10Y yield as we (finally) capture 1%, and continue to march higher: Note
WTF chart of the day: Note
If we hit the top of the white (daily) channel, that would mean we hit a new all-time high (378), on the same day a "Blue Wave", which was supposed to crash markets, happened: Note
Dollar is catching a bid here as bonds liquidate and crypto is bid: Note
Bitcoin is now up over 600% since the March lows, while the dollar is up just 8%: Note
SPY just kissed the high of the week, and the top of the red channel. Let's see if we get a rejection: Note
First rejection and bulls are testing again: Note
Are bulls really going for a new all-time high at 378.47? Testing the upper band of the channel again. Approaching the top of the white channel: Note
View from the hourly: Note
Essentially every major index on the planet is up today (strange), minus South Korea, and the Nasdaq, which by the way, is on the verge of going green on the day. Is that because it was a blue wave? Or is that because central banks all across the globe are injecting billions in "liquidity" in a coordinated fashion. England, for example, has the toughest lockdowns of all, and yet the FTSE100 is up a whopping 4% on the day. Many european nations are on severe lockdowns, yet their markets are up, also. People are dying around the globe after taking untested vaccines, to remedy a virus that doesn't affect 99% of us. Political science is now the new science, free speech is dead, and being conservative is essentially illegal. If you disagree with any leftist movements, (even if you're on the left), you're simply a bad person and you're labelled a right wing nut job who should be cancelled. Let me ask you guys this:
Is big tech and big media aligned with conservtaives, or are they aligned with progressives? Are state governments around the US who allowed and encouraged continued riots Democrat or Republican? What happened to the BLM riots? Oh that's right, Trump lost, so they ended. I'm not saying any of this to offend anyone, but what I'm saying is the democrats are bought and paid for by big tech and big media, and they're using the surpression of free speech to almagamate power and control over 99.99% of us.
Big media and big tech are not controlled by the 1%, they're controlled by the .01%, and so is the democratic party. We know exactly who these individuals are because the top 20 richest people in the world just saw, on average, a 30% increase in their wealth since March 2020, while many of them collectively sensored conservative views on their platforms, and pushed for further lockdowns. YOu know exactly who I'm talking about. The rest of us? All we get is distractions via more debt, more bullsh*t narratives, and more division.
This isn't about political party or an assault on the left. Personally, I don't let any group define me and neither should any of you. I'm a free thinker, and I have independent thoughts and beliefs that evolve when new information comes to light.
If, like me, some of you guys get stressed out about the state of the world, a good way to reset your mind is to do a 3 breath hug. Just breathe in as deep as you can, slowly, and then breathe out all at once. Repeat this just 3 times, and you'll be able to think more logically, with less of the burden of your intelligence hanging over your every thought.
Note
Second rejection at the top of the channel, but some notable support around 375: Note
Vix is catching some light support here around 22.50, let's see if this marks a reversal in the markets rocket like trajectory: Note
Hourly RSI rolling over after kissing 68.50 this morning. This could mean a potential reversal of the recent uptrend. Let's see what happens next: Note
Solid resistance around 376. Bulls keep knocking: Note
Bulls taking in the view from the new HOD: Note
Upper band of the white channel is within reach now, and is sitting around 377.75: Note
Good view from the daily. My harmonic projection is taking a bit longer than expected to play out, but it's not over yet: Note
Small caps are up 35% since the beginning of November. Talk about a blow off top: Note
Let's play with an idea for a second; if we hit the upper band of the white channel, what could be a potential catalyst for a correction, outside of the obvious technicals? It's also possible we break through and continue higher, but let's look at the former scenario for now. It's electoral vote day, and Pence has the power to delay the vote up to 10 days for an audit. He could also de-certify electoral votes in contested states, if he chose to do so (which would have implications for his future candidacy). What if Donald Trump comes out of this session as the winner of the election? Would we see a rally, or would the fear of chaos/unrest spark a global market sell-off? If you guys have any ideas on this, please share in the comments.
Note
It's getting a little slippery here as the bulls lose the red channel: Note
Retest of the channel, and a clear rejection: Note
FOMC minutes don't seem to be going very well. Powell mentioned the fact that they may taper bond purchases in the future, markets didn't like that. Losses accelerating here as volume spikes. The small square is the 21 period EMA on the hourly (372.30). Let's see if the bears take advantage of the downward momentum: Note
Vix is up notably off the lows, and just saw a 24 handle briefly before cooling off: Note
FED Chair, Jerome Powell, just said, "A number of participants noted that, once such progress had been attained, a gradual tapering of purchases could begin and the process thereafter could generally follow a sequence similar to the one implemented during the large-scale purchase program in 2013 and 2014."Note
Vix just hit a 26 handle: Note
Looks like we're setting up for some fireworks during power hour. Jobless claims out tomorrow, ADP showed a loss of 120k jobs in December: Note
Looks like things are seriously escalating at the Capitol. Here's a live update for anyone who hasn't seen the news as yet: zerohedge.com/political/capitol-hill-staffers-ordered-evacuate-after-protesters-breach-securityNote
I have to take off early today I'm afraid. Sorry to leave you guys hanging. I'll be back tomorrow with another live session. Hope you guys have a great night. Looks to me like we're going lower. Cheers!
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