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Saturday, October 25, 2014

Yellen Will Learn Fedspeak and Concentration Generated By Phase Transitions


News
While this headline likely gets filed under "I don't give two sh*ts about old news," it contains a lesson for those willing to press history's rewind button periodically. Yellen, a pure academic and probably a nice lady, has learned a lesson that Greenspan also learned the hard way nearly two decades ago - Don't comment on valuations, and if speaking is absolutely necessary, do so in a manner that confuses the hell out of everyone except those with ability to read between the lines. That's usually not the people asking the questions. Greenspan, the master of Fedspeak or Greenspeak, should have lunch with Yellen.

If Yellen thinks social media, biotech, and possibly stocks were beginning to defy gravity this summer (2014), frankly, she hasn't seen sh*t yet.  Irrational exuberance, driven by a phase transition of energy, can drive 'valuations' and equity trends to unimaginable extremes.

Biotechs despite a general stock market correction have broken out to new highs (chart).

Chart


Headline: YELLEN TAKES DEAD AIM AT SOCIAL-MEDIA COMPANY VALUATIONS

Federal Reserve Board Chair Janet Yellen is warning that social-media companies' share prices, and those of other high-flying stocks, are starting to defy gravity.

In her just-released full report to Congress on the state of monetary policy, the Fed chair says, "...Valuation metrics in some sectors do appear substantially stretched—particularly those for smaller firms in the social media and biotechnology industries, despite a notable downturn in equity prices for such firms early in the year."


more

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As a special thanks to the loyal Insights supporters, additional, market-driven money flow, trend, and intermarket analysis will be provided to Insight donors in 2014. This analysis will be revealed by an Insights key.



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Diffusion Charts Updated 10/21/14

DI Charts


    Equity DI Chart
    Bond DI Chart
    Gold DI Chart
    Silver DI Chart
    Copper DI Chart

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As a special thanks to the loyal Insights supporters, additional, market-driven money flow, trend, and intermarket analysis will be provided to Insight donors in 2014. This analysis will be revealed by an Insights key.



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Friday, October 24, 2014

COT Matrix Updated 10/21/14

COT Matrix


COT Matrix

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As a special thanks to the loyal Insights supporters, additional, market-driven money flow, trend, and intermarket analysis will be provided to Insight donors in 2014. This analysis will be revealed by an Insights key.



Paypal, a leading provider of secure online money transfers, will handle donations. Thank you for your contribution.

4-year-old boy losing battle with cancer celebrates an early Halloween

News
Those that study time recognize that despite being taught how to manage it from an early age, it cannot be controlled. This wisdom, usually accrued slowly over time with age, can come rather suddenly for some. Ethan and his family remind us of that today.




Headline: 4-year-old boy losing battle with cancer celebrates an early Halloween

UTAH – A Utah family knows they only have a limited amount of time with their son and they are determined to make the best of that time.

Four-year-old Ethan van Leuven is fighting for each day on this Earth.

At 22 months old, little Ethan was diagnosed with acute lymphoblastic leukemia.


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As a special thanks to the loyal Insights supporters, additional, market-driven money flow, trend, and intermarket analysis will be provided to Insight donors in 2014. This analysis will be revealed by an Insights key.



Paypal, a leading provider of secure online money transfers, will handle donations. Thank you for your contribution.

Review of the US Dollar

US Dollar
Persistent dollar strength would back the dollar-centric world into an economic, financial, and political corner that has no easy policy exit. The fall of democracy, liberty, and taxation with representation throughout much of Europe and Asian has supported a rally that few would call persistent today.

The majority still believes only a lower dollar lies ahead.  A similar expectation preceded the 1925 to 1932 rally that bankrupted individuals, corporations, cities, and nations, and set the world on a collision course with global war.

The US dollar index which has broken above the 2012 and 2013 highs will likely defy bearish expectation by testing the upper channel of 2008 trading range (chart 1).

Chart 1


The invisible hand, aggressively distributing strength, has generated a bearish setup (chart 2). Bears setups which are generated when DI falls below -60% suggest a growing imbalance within trend.  Imbalances often preceded trend reversals, so traders sitting on long-side profit should be tightening stops.

Chart 2


The major currency's bullish setup (DI greater than 50%) confirms concentrated distribution in the dollar. The bullish setup increases the probability for profit-taking or pause in the uptrend ahead.  The red boxes reveal that profit-taking from highs can be slow evolving process.

Chart 3


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As a special thanks to the loyal Insights supporters, additional, market-driven money flow, trend, and intermarket analysis will be provided to Insight donors in 2014. This analysis will be revealed by an Insights key.



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Review of Gold

Gold
While the message of the market 'favors' gold over silver, it still conveys a negative message. A key intermarket relationship used to define money flow direction added a new piece of information yesterday.





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As a special thanks to the loyal Insights supporters, additional, market-driven money flow, trend, and intermarket analysis will be provided to Insight donors in 2014. This analysis will be revealed by an Insights key.



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US Stock Review: Bears Growing Impatient

US Stocks
The bears, growing increasing impatient with every uptick, have watched 10,200 and 10,400 zones fall without much resistance (chart 1). This ease of movement through resistance zones has emboldened the chasers to buy.  Their confidence will grow as the size of their herd grows.  As I have written many times, blindly following this or any herd is generally hazardous to one's trading/investing health. Today's reactionary rally (bounce within a downtrend of cause building), driven by human behavior, the flow of energy (price) from gradients of concentration (COT analysis of leverage), and time (cycles and seasonality), ends only when the majority 'sees' continuation.

Chart 1




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As a special thanks to the loyal Insights supporters, additional, market-driven money flow, trend, and intermarket analysis will be provided to Insight donors in 2014. This analysis will be revealed by an Insights key.



Paypal, a leading provider of secure online money transfers, will handle donations. Thank you for your contribution.