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New alignments: None
The attack on the Japanese tanker has some suggesting a false flag has been raise to sway public opinion against Iran. The conspiracy theory is relatively easy to grasp but ignore the reality that the US is not seeking war with Iran. The US loves military spending. It's highly profitable and drives ego, but it's doubtful they would use these event to drive that. Conflict in the Middle East would be a distraction and many players around that region would welcome one - including countries like Turkey.
Perhaps it's a play on financial position as headlines tell us that short positions in the crude oil market are surging. A little facts getting tells us this is mostly hype to generate clicks as Crude's DI = 33%. DI = 33% is not neutral, but it's not statistically bullish either. If it's not statistically bullish, then shorting selling is by nonreportables and reportables is not distorted. If there's no distortion, then the market is still relatively stable.
Show me some markets that are highly distorted then. Cocoa and corn are highly distorted. Cocoa and corn's DI are -86% and -73%, respectively. Cocoa's distribution is relatively young as DI2 > 0%. Corn, however, is not. Corn's DI2 = -28%. This reading tells us that distribution has been ongoing for several weeks as corn rallies. This setup has created a powerful blocking dome, or heavy distribution over corn. Corn produced a similar setup in 2012.
Using the Matrix
The value of the Matrix is far more than a study of price. Trends are a function of price, volume (force), volatility, and TIME. The order of their importance is as follows: (1) TIME, (2) volatility, (3) volume & price alignment. Volume and price alignment, a setup that triggers action, favors Grade A & B, early cycle markets under high compression (↓COM). ↓COM suggests extremely low volatility, a quiet trend ready to explode into high compression (↑EXP). Weekly and monthly breakout signals are not finalized until the end of the week and month, respectively. Signals generated before that could be temporary. Keep this in mind when reading alignment.
Suggested Reading: The Cycle of Accumulation and Distribution (CAD), Leverage Oscillator (LTLO), Diffusion Index (DI), Volatility Bandwidth (BW), Compression (COM), Expansion (EXP), Alignment, Upside Alignment, Downside Alignment, Sentiment Model, Intermarket Trends, VIX Model, Economic Activity Composite, Long Term Cycles.
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