Weekend update

REVIEW

The week started at SPX 2781. After a slightly down opening on Monday the market dropped to SPX 2722. Tuesday it had a gap up opening, hit SPX 2743, dropped to 2719, rallied to 2755, then dropped to 2715. Another gap up opening on Wednesday carried the SPX to 2747. But it quickly reversed trading down to a low of SPX 2671 on Thursday. After that it began to rebound and hit SPX 2747 on Friday. For the week the SPX/DOW lost 1.9%, and the NDX/NAZ lost 2.35%. Economic reports for the week were mostly positive. On the downtick: capacity utilization, the Philly FED, plus the budget deficit and weekly jobless claims rose. On the uptick: the NY FED, the CPI, retail sales, export/import prices, business inventories, and industrial production. Next week’s reports will be highlighted by durable goods, the leading indicator and housing. Best to your holiday week!

LONG TERM: downtrend probable

Now that some of the vocal pundits have been touting a global economic slowdown, and possibly a bear market and recession, there are two charts we would like to cover. First confirming the economic weakness is the ECRI. Notice their leading indicator has dropped below zero in recent weeks indicating some softness in the economy. It has not dropped to levels that would suggest a recession is on the way. In fact, it does not even look like 2015/2016 yet. Which was a bear market with no recession.

Second is the long term SOX index. Semiconductors have been hammered lately with some of the popular stocks down nearly 50% from their highs. This is somewhat to be expected when the 2-year cycle is bottoming. We are not sure where the index will bottom. But the low should occur this year: 2008-2010-2012-2014-2016-2018. After it does the SOX should launch into another 1 to 2 year up cycle.

Our long term SPX count remains the same. Five Intermediate waves up, with a subdividing third wave, from early-2016 to late-2018 to complete a Major wave 1 bull market (1810-2941). After that high the market entered what we suspect will be a short-lived Major wave 2 bear market, with a possible loss of 15% to 20%.

MEDIUM TERM: uptrend possible

The first wave down of the bear market, Intermediate wave A, appears to have ended at SPX 2604 (11.5% decline). Now the market is in a counter-trend Intermediate wave B rally. Since Int. A was three Minor waves down, we have been expecting Int. B to be three Minor waves up. Minor wave A topped at SPX 2815, and Minor wave B probably bottomed at SPX 2671. After the Minor wave A high we were expecting a drop to SPX 2700. The market went right through that level on Wednesday, and bottomed on Thursday.

We have been expecting the rising Minor B to rally back to SPX 2815 area or slightly higher. However, due to volatility and seasonal factors it could rally all the way to SPX 2880. At that level Minor C would about equal Minor A. After Int. B completes then the bear market should resume with Intermediate wave C.

SHORT TERM

At the recent SPX 2671 low the market presented a short term double positive divergence, and a sufficient oversold condition on the daily RSI. On Friday the SPX put in its first higher daily bar since the Minor wave B began. Further signaling that Minor B may have indeed ended at SPX 2671. From that Thursday low we have counted eight waves up, with a possible ninth underway: 2709-2691-2735-2712-2739-2720-2747-2734-2744 so far.

Not expecting any impulsive activity for a counter-trend wave, this choppy overlapping activity looks quite normal. We think it should continue this way into early December. Then the market is likely to rollover heading into the FED’s next rate hike in mid-December. January could be a nasty month to start the year. Short term support is at the 2731 and 2656 pivots, with resistance at the 2780 and 2798 pivots. Short term momentum ended the week just below overbought. Best to your holiday trading.

FOREIGN MARKETS

Asian markets were mixed on the week for a net loss of 0.2%.

European markets were all lower losing 1.8%.

The DJ World index lost 1.2%, and the NYSE lost 1.1%.

COMMODITIES

Bonds appear to be uptrending and gained 0.6% on the week.

Crude remains in a downtrend and lost 5.8%.

Gold is in an uptrend and gained 0.5%.

The USD is still in an uptrend and gained 0.1%.

NEXT WEEK

Monday: homebuilders index. Tuesday: housing starts and building permits. Wednesday: weekly jobless claims, durable goods, existing home sales, consumer sentiment and leading indicators. Thursday: Thanksgiving.

CHARTS: https://stockcharts.com/public/1269446/tenpp

INITIATIVE Q

Initiative Q is building a new payment network and giving away significant sums of their future currency to early adopters. It’s by invite only and I have been granted a limited number of invites. First come, first serve. My personal invite link: https://initiativeq.com/invite/HWKBnlwpX

https://www.techinasia.com/talk/founder-challenge-visa-global-currency

About tony caldaro

Investor
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798 Responses to Weekend update

  1. fotis2 says:

    CL can’t see much wrong with a wee bit long nibble here support 200ma on weekly+HWB stop at 51s.IF all goes fine with a heads up from the stochastic next week should be good for back to highs R/R 1 for 10…. IF
    https://invst.ly/9afvm

  2. stcoleridge says:

    Quick shout out to Allen Kimble. Your calls have been impressively unimpressive almost to the point of disbelief. Whatever the opposite of the Midas touch is you have it. I’m going to call it the Shiteas touch.

  3. chrisk44342 says:

    if you are bullish next week this is where you go long https://invst.ly/9aftq

  4. Lee x says:

    Happy Thanksgiving Tony & gang !

  5. purplember says:

    shorted CL at 55.80 but got out at 54.30 which is 50/61% long area. don’t want to hold over long weekend. i’ll take the 1k profit and run to turkey day

  6. phil1247 says:

    travis

    the short that leads to 2617 traded six times today
    i dont know how many more chances you are going to get at it

    i am taking it home over the holiday
    hope its not a “turkey “

  7. Bill Manscoe says:

    This blog has been blessed with a “turkey” just before Thanksgiving. I hope that there are no leftovers after this weekend. After all a little turkey goes a long way particularly if full of the kinda stuffing our turkey has. Hope you all have a great Thanksgiving.

  8. searchme2017 says:

    Here’s some more for anyone interested:

    https://initiativeq.com/invite/H-1jInT67

  9. 7dayyss says:

    Hey Tony; just wanted to wish you an early Happy Thanksgiving and glad that your health came around and managing your condition. Stay well!!!

  10. elmer510 says:

    I looked for IM B and a possible higher SPX, but counter markets are difficult to trace.
    Right now, a lot of uncertainty . Cash is king.

  11. Edward Disney says:

    Since the late morning high today on the Nasdaq,it looks to me like a very tight triangle.

  12. jobjas says:

    SPX next target 2600

    • allen kimble says:

      i’ve been tracking you jobjas. Your record is horrendous, not quite as bad as aamichael but just as bad as mcgone. 2600? what are you smoking good sir?

      • scottycj1 says:

        Allen
        Based on your current momentum, you are set to pass AAHM and MCG and EVERYONE else combined on this blog to be the biggest Dick Head.

        • mcgcapital says:

          Allen is very sarcastic, but there’s some entertainment value. He’s trolled my and Aah for being bearish, then Freddie and Valunstr for being bullish, and now jobjas for being bearish. He’s having the uncanny knack of somehow being a near perfect fade since he reappeared the last few weeks.

          For my own part, I only comment in a negative way if someone posts something they claim to be factual but to me doesn’t appear to be based on anything. Which I think is why we clash as you like using turn dates or solar movements and I can’t see the evidence for that. I’d also prefer it if people are making a recommendation on direction, if they lead with where the view is invalidated and not leave it open ended. That’s not so we can all point out when someone gets stopped (which should be second nature), but just to better reflect the reality of trading. Some people on here just fire off calls left right and centre but say nothing about when it would be wrong, which makes it useless to readers.

          There’s no malice there if i disagree. Enjoy your holiday tomorrow Scotty

        • allen kimble says:

          Now, now, how can you put me in the same category as AAmichael and MCGone? Those two are by far the most annoying. Aside from their lack of trading skills, they are shockingly arrogant to the point of disbelief. You would think that AAHM would be humble from losing all his capital in 2016 but noooo. MCGone? well, Im assuming based on his infatuation with the FTSE, he is British. Need I saw more about those people.

          Ohh btw ..You called me “dick head” ? I know you can do better than that.

          Cheers,

          • scottycj1 says:

            You dont understand…..your not good enough to be in a higher category than Dick Head.
            You do have serious energy, inertia and momentum though…it wont be long until you move up into the :”Asshole” Category….your real close.

      • jobjas says:

        You are welcome

  13. Rick Jend says:

    I have 2 invites remaining on my Initiative Q if anyone is interested. Here is my link:

    https://initiativeq.com/invite/rUg0d-A6X

  14. travis01 says:

    Here is my invite link: https://initiativeq.com/invite/HZjzPrlRQ

    This link will stop working once I’m out of invites. Let me know after you registered, because I need to verify you on my end.

    • millswing says:

      Here is another one

      Initiative Q is an attempt by ex-PayPal guys to create a new payment system instead of credit cards that were designed in the 1950s. The system uses its own currency, the Q, and to get people to start using the system once it’s ready they are allocating Qs for free to people that sign up now (the amount drops as more people join – so better to join early). Signing up is free and they only ask for your name and an email address. There’s nothing to lose but if this payment system becomes a world leading payment method your Qs can be worth a lot. If you missed getting bitcoin seven years ago, you wouldn’t want to miss this.
      Here is my invite link: https://initiativeq.com/invite/BM_dsyQ07
      This link will stop working once I’m out of invites. Let me know after you registered, because I need to verify you on my end.

    • searchme2017 says:

      Looks like the interest is still up…..so here’s a couple of more invites:

      “Initiative Q is an attempt by ex-PayPal guys to create a new payment system instead of credit cards that were designed in the 1950s. The system uses its own currency, the Q, and to get people to start using the system once it’s ready they are allocating Qs for free to people that sign up now (the amount drops as more people join – so better to join early). Signing up is free and they only ask for your name and an email address. There’s nothing to lose but if this payment system becomes a world leading payment method your Qs can be worth a lot. Here is my invite link:

      https://initiativeq.com/invite/H-1jInT67

      This link will stop working once I’m out of invites. Let me know after you registered, because I need to verify you on my end.”

    • tim1029 says:

      Travis
      Just registered thanks

  15. lml25 says:

    All i can contribute is that SPX could easily make a run at 2704 or even 2724 and not break the bearish pattern.Both are moving averages. I AM starting a group that wants to invest in the lint that I pull out of my clothes dryer.This may be the next great payment system–Lint!!!Limited supply available,so be early with your cash offerings.Later all.

  16. Vincent Murt says:

    hi has anyone ability to invite me to initiative Q? looks interesting, regards Vincent

  17. HI all anyone got ability to invite to https://initiativeq.com ? sounds interesting.tks
    vincent https://twitter.com/vimtrading

  18. kvilia says:

    asa, phil, and everyone except trolls.
    ES 2690 is coming, counter trends are hard to play for me. Expecting a pretty good swoosh next 1-1.5 weeks after Thanksgiving to set the final bottom. I think its going to be another 200 pts.
    CL as expected maybe retracing to 57 and again sloppy in counter trend. I can never get fib entries there, that’s characteristic of the counter trend.
    Now, CL is at the interesting junction. HWB from 2015/2016 lows is 51.59, and it did get to 52.77. Given market volatility, I dont believe its bottomed, plus it has a tendency of dipping in before changing trends. The visible trendline connecting 8/16 and 6/17 points to around 47 from the 55-57 level, which is right above 45.62, 61.8% retracement. So I’d say CL sells off one more time from 57.04 hwb extension short or even 56.03, 38% special before setting a bottom.
    Happy Thanksgiving, Tony and all!

    • allen kimble says:

      Dream on. They are going to ramp this market higher into G-20, through the first week of December. Do you care to make a trade based on this 200 swoosh? ……..Nah..I didn’t think so……NEXT

    • kvilia says:

      Trading is about executing your strategy and protecting your position. Of course I will execute a trade with a stop, and if market has different plans, I will get stopped out, just like you claimed being stopped out of your infamous long trade just a couple of days ago. Moreover, DH system recommends waiting for the counter trend break first, and then enter position on the pullback. This way you are not picking tops and bottoms but can successfully trade about 70-80% of a trend.
      Hope it does make sense and provides educational value for you.
      Good luck.

  19. Hello all, still got some invites left if anyone is interested, hope this doesn’t bother Tony. Happy Thanksgiving to everybody.
    https://initiativeq.com/invite/rWkApEl07

  20. allen kimble says:

    Did you BUY at the open FOLKS? You should have. The lack of follow through selling is a clear indicator the bottom “IS IN” and we now go up until the 10th of December. The Bear market seasonality. Don’t let the DH boys persuade you. The bottom is in.

    CHeers,

  21. lunker1 says:

    yesterday’s +D on 60min SPX INDU good for a pop today.

  22. Jack kendo says:

    Looks like everyone is looking up now. Any bear left?

    Cr. CBZ

    cheers!

    • fionamargaret says:

      Bearish…..2500, 2400, 2300….
      $WTIC down to 34
      DWT to 24.25
      TVIX
      Stops
      X

      • Jack kendo says:

        Fiona,
        Thought I was the only bear left. 🙂
        I am looking for a new low below yesterday’s SPX 2631.
        Latest this Friday, very possible today 11/21.

        cheers!

        • scottycj1 says:

          Your not a bear Kendo…..your a CoolBiz follower…pretty obvious now.
          No need to listen to you….just read CoolBiz

          • Jack kendo says:

            The difference between CBZ and me is:
            CBZ is looking for 2675-2703, ans he also has a bullish ALT.
            I am looking for way below 2631 either today or Friday, and will not reach CBZ’s 2675-2703.
            And I am looking for a CRASH coming soon. And I am the only one looking for CRASH, which you don’t hear it from anywhere else.
            Big difference.

            cheers!

      • fionamargaret says:

        Sell into rallies….cash is good…x

    • cj32 says:

      His corrective Target is 2675-2703 for minute[ii], may fall short r extend as all corrections do. https://twitter.com/coolbizone/status/1065224451275378690

      • Jack kendo says:

        cj32, thanks for the specific target price and sharing.
        So, is CBZ long now or covered short & waiting for the target price 2675-2703 to short again?
        Or CBZ still “hold shorts and enjoy the ride” as he tweeted and suggested yesterday?

        cheers!

        coolbiz1:
        SPX -52.75 at 2638, a lot more downside is coming. No reason to get fancy, hold shorts and enjoy the ride….GL
        7:12 AM – 20 Nov 2018

        • cj32 says:

          His leveraged short trades ,UPRO shorts, Put options and futures were all booked profits yesterday (he does not give back any or very little of it) His short stocks are held with profit STOPs above 2705 on close basis.

          • Jack kendo says:

            Thanks. CBZ is an excellent trader!
            (he does not give back any or very little of it) – that’s what I need to take heed of, even though my analysis is good, but gave back quite some profits from time to time.
            Even though I am a position trader for this big one, still need the skill of CBZ’s ( does not give back any or very little of it).

            cheers!

            • cj32 says:

              Here are some of his trades for 7-8 days in August. I had posted these in response to a few DM he received. He trades in both directions calls and Puts at different times, only on days of clarity (he is waiting to go re-short ES and SPX put near 2690 level by today or on Friday). Just for some ideas…You may see his Tweeter for more or in future…

              With due respect to Tony, if you feel its not appropriate to post these, pl. do remove.

              • Jack kendo says:

                cj, Thanks for sharing.
                I wrote a note to remind me from time to time:
                “do not give back any or very little of it”.

                I am confident on my analysis, but has a lot of room to improve on trading, gave back too much profits from time to time.

                Looks like CBZ in looking for the gap filling at 2690.73 from 11/19 ~ 11/20.

                cheers!

          • aahmichael says:

            If he trades futures, then why on earth would he ever trade UPRO, or any other leveraged ETF? Leveraged ETFs are a hugely inferior product in every way compared to futures. It makes absolutely no sense to trade them, if you also trade futures.

            • cj32 says:

              He has a lot of capital to commit, finds UPRO with stock shorts like AMZN, NVDA, NFLX, MU, AAPL, TGT,COP to name a few, fits well due to familiarity, liquidity, large movements and being able to manage STOPS and profit stops.
              I had the same question for him 6 years ago.

              • cj32 says:

                aahm,
                Here are a few ES trades I had posted back in March in response to DM’s by quite a few people. He is always open to other ideas, can generate over 20% returns with managed risks. Over longer holds?

              • aahmichael says:

                It’s still stupid. Any extra cash he has should be sent to his futures account. If he holds leveraged ETFs overnight, then that means he has NO STOPS at all for 14 hours of each day that he’s holding the position, and he can’t exit his position during those 14 hours. As I’ve said many times before, that’s like playing Russian Roulette with a bullet in every chamber. Furthermore, the lack of liquidity and the tax treatment on ETFs is horrible compared to futures, not to mention the built in never-ending loss of capital due to how the ETF prices are calculated, along with the internal expense fees.

  23. Be careful bulls…./VX tested and defended (didn’t go below) a 50% long around the open. /VX shows no signs of going down….yet. BTW, I think DH said that there is a new contract for /VX I wonder if this is adding and additional volatility in today’s trading……I don’t have enough knowledge/data to offer an opinion.

    • Good for a 7 point pullback. As I type…/VX coming back down to test again it’s 50% long which should rally /ES to at least 2668- 2675 multiple profit targets.

      • stan911 says:

        Also a gap at 2679

        • Hi stan…you may be right…but with this increased volatility, looks like the algos are playing 50%, 61.8% longs/shorts and profit targets more than they are gaps. There are a few unfilled gaps. I don’t think humans are trading this market for the past few weeks…volume is probably 85% (+) algos, although I have no proof of that…just looking at the tape.

          On the 1 minute bar, the entire trading activity to me today looks like 3 waves, a, b and c’s. …corrective, as opposed to impulse.

          4 trades this morning, paid for dinner tomorrow and then some, time to walk from my trading computers. Will not carry a position over Thanksgiving. Good luck all and a special Happy Thanks to Tony and all.

  24. mcgcapital says:

    FTSE sell set up into 7030. Not sure if the lows are in in Europe, but looking for either a slightly higher low, retest of yesterday or retest of October lows. So 6850-6930 target area. Then probably up.

    SPX i’d look for the retest of 2600. Could easily undercut by 30-50 points though which would reaffirm the bearish outlook. Then sizeable rally

    • courtesyoftc says:

      mecg ,There is 9.75 dividend today on ftse , and acceptance above 7000 ,.may posh it higher ,hopefully i’m wrong

      • mcgcapital says:

        Got stopped for -10. America not selling today. The divi I view as neutral because sometimes it goes up and other times it goes down into it, plus the index is adjusted for it.

        I think 7100 is more important as a bull/bear line than 7000 because 7000 is being crossed either side on most days. Above 7100 I’d expect rallies to carry unless it breaks back below. Above 7000 but under 7100 it’s still in the range so can easily head back towards 6900

    • Right there with you MCG. 2594 on or about Monday for the S&P, then a sizable rally. Been saying it since last week.

  25. trin20 says:

    For those interested I have a number of Initiative Q Invites available. My link is:
    https://initiativeq.com/invite/SGgRlSyRQ

  26. phil1247 says:

    travis…

    re : email

    bull above 2655
    but the short i gave you yesterday traded again at 67
    exit of shorts at 37 target was the correct move so far
    no position now
    good luck

  27. My 2 cents, needs to clear 2665 cash to be bullish. If it does then will see which count is correct. Either a wave 2 up of a bigger down move or up to over 2815 for c of B. Have a great day and happy holidays

  28. scottycj1 says:

    Think the market makers are watching DH levels these days

    I’m caught in a trap
    I cant walk out

  29. quickrick38 says:

    Well, cj32 gave us the bearish count (thank you very much). Now for the more bullish but STILL overall bearish count 🙂

    • quickrick38 says:

      A number of other posters have made some other excellent point: Just below AS points to the market moving up from here.
      Valunvstr showed us the plethora of positive divergences.
      Of course, there’s one in every crowd…one poster (yes the same one who likes to visciously attack others) gave us all hell if we didn’t believe we are going straight down.
      In any event we ARE going up from here…whether that’s a retrace or a wave ‘c’ of ‘B’. Good luck all.

      • Anthony Saraniti says:

        This mornings high hit a profit target. /ES coming back down to test a 50% LONG at 2645.

        2642.35 fills the gap and is the 61.8% LONG. I suspect that could be an interesting test for both the bulls and bears as that is the updated line in the sand for today’s trading.
        The scenic in me says large U. S. traders want their fill before the rally begins in earnest.

    • travis01 says:

      CJ is pretty good but he flips direction on a dime on major calls, and somehow always seems to tweet out the new direction after we are headed that way. So many tweeters do the I Told Ya So…Follow Me…I Haven’t missed in Years

      • travis01 says:

        Ever read that Mark Minnerveli guy? He may or may not be good but he is an ass and degrades amateur traders into paying for services and books and seminars.

      • travis01 says:

        Sorry meant Coolbiz not CJ

      • cj32 says:

        I have followed CBZ for 7 years.
        Do you have a specific example you can give? His Tweets are date and Time stamped (PST Zone). All you have to do is to go to investing.com free charts for 1 MIN. SPX and see when the Tweet was done?
        For turns, he follows price action very very close for all his trades and never gives back much of profits. Yesterday at the bottom 2631.52, it looked like it had 5-6 more points to go down but it turned up, it corrected without going down further. At that time he made the Tweet for Wave [ii] up. In real time to call the turns ahead is highly uncertain, its best to wait for some confirmation of its continuing in other direction.
        According to him its a game of high probability BUT NEVER CERTAINTY due to constantly changing uncontrollable variables.

  30. Anthony Saraniti says:

    Bottom line for trading today…… /ES 2662.50. bullish above and bearish below. Happy Thanksgiving all.

  31. samurai055 says:

    Hi all still got some invites left if someone need it. Have a great day.
    https://initiativeq.com/invite/rWkApEl07

  32. vivelaamo says:

    Looking very bearish indeed but if October’s low is not breached I’d say take your profits bears. The party could soon be over until after Christmas.

  33. lunker1 says:

    ESZ18
    2818 high anchor Nov 8
    2672.25 low anchor Nov 15
    Nov 16/19 just above the .50

    -.272 target 2631 hit
    -.618 target 2581

  34. Menachem M. Uzan says:

    Does anyone see what I see, which is a 200 point rally in the SPX in short order (1-2 days) to kick off the next bull market and complete the greatest bear trap in stock market history or am I the biggest fool on the planet? This is a great time to buy stocks.

  35. ipman1893 says:

    Hello all, got some invites left if anyone is interested. = )

    https://initiativeq.com/invite/BVVtFoR6Q

    • millswing says:

      Can jou please verifi me

    • millswing says:

      can you please verify me

        • millswing says:

          Initiative Q is an attempt by ex-PayPal guys to create a new payment system instead of credit cards that were designed in the 1950s. The system uses its own currency, the Q, and to get people to start using the system once it’s ready they are allocating Qs for free to people that sign up now (the amount drops as more people join – so better to join early). Signing up is free and they only ask for your name and an email address. There’s nothing to lose but if this payment system becomes a world leading payment method your Qs can be worth a lot. If you missed getting bitcoin seven years ago, you wouldn’t want to miss this.
          Here is my invite link: https://initiativeq.com/invite/BM_dsyQ07
          This link will stop working once I’m out of invites. Let me know after you registered, because I need to verify you on my end.

  36. lunker1 says:

    SPX intraday double bottom with +D

  37. cj32 says:

    Cr. CBZ

  38. fionamargaret says:




    Thanks Chris Kimble

    Thanks Tony……and everyone xx

    • valunvstr says:

      It’s always easy to observe out divergences prior to major market peaks and imply a similar outcome only divergences occur all the time and the depth and length of each correction is very different. Often very shallow in time and/or price.

    • fred perriee says:

      what happened to the 2013/14/15 junk bond bearish message… never shown above (and possible the longest message on that chart)?

      • fionamargaret says:

        Fred, if you read the wordage inside the boxes, I think it will make things clearer.
        Sorry for my not getting back to you earlier…hope this helps…x

    • fionamargaret says:

      I do not comment on Kimble’s charts, but I think there is not just the stock market deflating, but also bonds making yields spike some.
      The interest on credit default swaps is not helping GE and PG&E.

      GE down to 4.
      QQQ down to 141
      IWM down to 131
      FAS down to 52

      I think we are in a massive wave down, where 2500 is the first line to go through….x

    • Thanks Fiona…….Kimble sez inverse head and shoulders on GOLD. Only problem is that it’s the head & shoulders of a dead guy.

  39. Page says:

    SPX to slide below 2600 tomorrow, may be buying opportunity in afternoon….

  40. Hi,
    CL close to DT target which coincides with ma200 and broken trendline value
    if it fails to make a bottom at this point,backtest
    https://invst.ly/99-fo
    https://invst.ly/9a074

  41. I am really shocked at all of the people saying the FED has to back off raising rates.
    Cramer is a total embarrassment.
    I saw Jeremy Seigel (some kind of doctor) today on CNBC. Not much better.

    Of course, these are the people of the Stock Market (Equities), demanding higher prices, as if this is some proud main street parade, the sole support of America.
    However, on the other side of capital formation ledger is the Bond Market.
    Does only the stock market deserve a return, but not the bond market?
    Ten years ago, 3 month t-bills paid 5.00%.
    Now, after two years of FED increases, they are just over 2%, and the “stock vigilantes” are going crazy.
    No more rate increases !!!!

    Investment markets are centered in U.S. (NYC) because it was always held that free market are the rule here. And that is probably why the U.S. Dollar is extremely strong past few years: we are the bastion of free markets, as opposed to other trading partners who have negative rates on their high grade debt. That is part of a system of policies called Statism.
    Don’t get me wrong, I make most of my money every year in stocks. I would love a continued rally.
    But not at the expense of possibly compromised capital markets.
    That might have very bad long term consequences.

    Get the rates up, and equity markets will spill to wherever they have to go.
    Then we can get on with a normal strong capital market, strongest in the world.

    Sorry for the rant.
    GLTA

    • aahmichael says:

      And then there’s Trump: ““The economy has never been stronger, which is why I want interest rates cut immediately.”

      What school did he say he went to?

      • Michael,

        Trump, is an inverse force for the FED.
        The FED will naturally do the opposite of what he says, for at least the next 4-6 months.
        Please just leave his name out of it.
        I think a lot of people read Tony’s Blog.

      • Anthony Saraniti says:

        It’s called the school of politics! Every POTUS always talks up the economy, tomorrow will be a better day or simply give sssurances to the American people that things are fine, enjoy your holiday.

        What did you want him to do, tell the truth?… that Yellen was too busy trying to keep her job in a HRC adm. that she forgot to do her job. She should have started a more robust tapering program sooner. She also should have gradually raised rates so Powell isn’t/wasn’t forced to play catch up. Powell playing catch up is scerbsting this decline.

      • Anthony Saraniti says:

        It’s called the school of politics. It’s the job of the POTUS, to talk up the economy, put America’s best foot forward and of course the fun will come out tomorrow. The American people need constant assurances that things are fine……enjoy your holiday.

        What did you want him to say. This decline is mostly Yellens fault by trying to keep her job, she forgot to do her job? She should have started a more robust tapering program and she did not. She should have gradually raised interest rates to prevent inflation and she did not. Now the adult in the room, Powell, is forced to play catch up.

    • tommyboys says:

      This is assuming any of this is even ABOUT rates. May be about tariffs or just a well due correction regardless of rates.

      • fenster6 says:

        It is about trade wars which we were supposed to be winning, remember. the SSEC crashed but the SPX didnt and trumps crowed about how smart he was. Then as Tony has pointed out the trade trauma is catching up to the market

        1) the S and P gets 45% -50% of it’s earnings from OUTSIDE the US. You cut them they cut you.

        2) The tax cuts and spending on defence just added up to a one TRILLION dollar deficit this year and that is not the time to piss of your creditors , which is what he has done

        But don’t expect a mea culpa. he only takes credit for good things. Expect kudlow and a few others to be fired soon.

        • tommyboys says:

          We would pay a price for callng China – and others – out on screwing America, we just finally got a prez with big enough matbles to do it. Had we set things right initially this could all have been avoided. If we waited another decade or two it would be many orders worse for our kids. We need to pay a price to get things back in line and stop the intellectual theft. Better now than later. We’ll see who blinks.

          • fenster6 says:

            Sure tommy
            going $1 TRILLION into deficit to add to the TEN Trillion debt sure sounds like strong, independent policy to me.

            You have bought into the trump cult. Remember when he said trade wars were FUN!!?
            and when he boasted that the SSEC dropping and not the SPX showed we were winning.

            Well not a peep out of the old coot now.

            • Tim Waters says:

              Ten Trillion debt? The exact figure of Obama’s eight years. Of course, you very conveniently forget it. Pathetic.

              • tommyboys says:

                What you don’t hear – after all the hype – is how the Bill & Hilary tour has been cancelled due to a lack of interest.

                Tax cuts result is higher spending which results in more tax generation. It’s absolutely the right strategy. Equalizing the playing field is absolutely the right thing as well. Always pain in adjustment. Pay me now or pay me later. Market is correcting after multi- year runs. Expected and normal.

    • Tom, jeremy siegel was my professor at Wharton…pretty sharp cookie, imo…he was outstanding in the classes I took there..

  42. valunvstr says:

    Levered at 2636 and 2633 with UPRO and 40% levered with DXSLX at the close today (unfortunately because I have to us MF in certain accounts I was not able to get the 2636 as I preferred). Again, this trade is not related to my system. It is based on other criteria like weekly stock and RSI6 divergences and daily TRIX divergence. Expect to lever more and additional weakness and trade out at either RSI2 daily or weekly gets to 70. Most likely weekly.

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