Thursday, August 17, 2017

Chart of the Day #Intermarket Trends Junk and High Grade Bonds

Chart of The Day
OCTOBER: This is one of the peculiarly dangerous months to speculate in stocks in. The other are July, January, September, April, November, May, March, June, December, August, and February, Mark Twain

There are two times in a man's life when he should not speculate: when he can't afford it and when he can, Mark Twain


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Wednesday, August 16, 2017

Politics Creates Noise Within The Primary Trends

News
While politics creates noise within the short-term (daily trend), it has very little influence over the primary trend (weekly and monthly trends). US stocks entered cause building over the short-term not because of politics but rather the cyclical flow of energy. Cause, the building of energy to break higher or lower, can be bullish or bearish. The characterization of which is determined by the alignment of the primary trend (price and volume). As long as the primary trend, defined by weekly and monthly charts, remains up, the bears, even the high priced ones screaming top, will go silent if the market breaks out to new highs with force. This is not a forecast but rather than observation.

Headline: Wall Street pares gains after Trump disbands two advisory councils

(Reuters) - U.S. stocks pared gains on Wednesday afternoon after President Donald Trump said he is disbanding his manufacturing council as well as the strategy and policy forum.

Trump's move comes after two more CEOs resigned from the manufacturing council on Wednesday in response to the president's comments on the Charlottesville violence over the weekend.


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Australian Dollar Review #Aussie $FXA

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Aussie Dollar Review
Those that view the message of the market on daily basis are likely confused by trading noise. While trading noise contributes to the long-term trends, it does not define them. Human behavior tries to explain trading noise as a meaningful trend. This confuses the majority which, in turn, contributes to their role as bagholders of trend transitions.

The Aussie's overall trend, revealed by trends of price, leverage, and time, defined and are discussed in the COT Matrix for subscribers.

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Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.

Tuesday, August 15, 2017

Chart of the Day NYSE McClellan Oscillator $SPX

Chart of The Day
OCTOBER: This is one of the peculiarly dangerous months to speculate in stocks in. The other are July, January, September, April, November, May, March, June, December, August, and February, Mark Twain

There are two times in a man's life when he should not speculate: when he can't afford it and when he can, Mark Twain


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Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.

Monday, August 14, 2017

Dividend Yield Cycles $SPX #DivdendYield #Free

Dividend Yield Cycles
As long as the US Stock rally continues defying conventional wisdom of the majority, for example a bull market in stocks cannot coexist with a bear market in bonds or backdrop of rising interest rates, bearish calls that ignore even the most most basic cyclical definitions of bear markets will continue (1 - Yellen has been wrong, 2, 3, 4). Trend impulses origination from concentration of sentiment, price, leverage, and time. These forces which shape cycles in dividend yields, help investors define equity 'bubbles' and 'pits' or extremes of greed and fear.

Who's the more foolish; the fool or the fool who follows him?


Experienced traders either recognize that the majority always follows the fool or they will be destroyed by them. This makes understanding the message of the market extremely important.

Subscribers can follow these trends in the Matrix.

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Price

Dividend yield's trend oscillator CO) defines a bull phase in US stocks since April 2016 (chart 1).

Chart 1 Dividend Yield Trend Oscillator (LTCO) 2000-2025


Concentration or Cycles

DYC1 and DYC2, the more volatile dividend cycles, not only refute the bears' bubble claims but also suggest that stocks are closer to oversold than overbought (chart 1). Forecasts of a 4,000 point decline in the DOW, growing risk of a major top, or call of very high valuations (1,2) will be forgotten when extreme negative concentration from DYC1 to DYC4 tighten risk management and/or trigger short positions against what will likely be raging optimism towards US Stocks by the majority (chart 3 and 4).

Collapsing long-term dividend cycles (DY3C and DYC4), those observed in 1899,1929, 1956, 1987, 2000 and possibly 2020, can be driven by speculative manias or panics. Manias are driven by risking-taking, while panic are driven risk-aversion, the flow of money from 'risky' assets to safe-haven assets against the conventional wisdom (logic) defined by economic trends. Risky assets can include traditional safe havens such as sovereign bonds when confidence on the public sector is deteriorating rapidly. The public, a majority of believers that negative concentrations are driven by speculative manias only, won't recognize their mistake until the later stages of the rally. Aggressive, late stage buying will help them solidify their historical role as the bagholders of panics and manias.

DYC1 and DYC2's decline from their December concentration suggests a market transitioning from bullish concentration to neutrality. Closes below -1 and -2, readings that urge caution, would likely coincide with rising optimism of the majority. This would be bearish.

Chart 2


Chart 3


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Sunday, August 13, 2017

"The Bull Market Has Come To An End" Says Dennis Gartman

News
The worry that the Bull Market has come to and end is not confirmed in the message of the market. The Dow Industrials stills sits on important support as short-term trading indicators from put to call ratios to extreme money flow readings suggests at least a short-term bounce is due. The movement of money/trading follows the Cycle of Accumulation and Distribution. Tops rarely materialize overnight. Buying climaxes are followed by a lengthy period of distribution or cause building. Causing building is characterized by numerous failed rallies, low volume tests, high retail participation, and excessive optimism towards stocks. This does not describe the backdrop for stocks in 2017. In fact, investors have remain stubbornly bearish on stocks since 2009. A more likely outcome would be a false breakdown, a short-term flash crash that spikes pessimism and fuels an unexpected rally in 2018.

Headline: Gartman Stakes His Reputation That "The Bull Market Has Come To An End"

If the algos were waiting for just one catalyst to unleash the buy everything, sell VIX program, they may have gotten it moments ago when, following a global rout across markets on yet another day of North Korean nuclear war concerns, Dennis Gartman, staking his "reputation" said that he is "fearful… very… that this wondrous bull market that began in the spring of ‘09 has come to an end and we do not make this statement lightly for we know the damage that can be done to an already damaged reputation if this statement proves to be wrong."


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Saturday, August 12, 2017

US Treasury #Bonds Review $TLT

US TBonds Review
Those that view the message of the market on daily basis are likely confused by trading noise. While trading noise contributes to the long-term trends, it does not define them. Human behavior tries to explain trading noise as a meaningful trend. This confuses the majority which, in turn, contributes to their role as bagholders of trend transitions.

US Treasury Bond's overall trend, revealed by trends of price, leverage, and time, are defined and discussed in The Matrix and for subscribers.

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Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.