As I read, watch and listen to all the supposed “expert commentary” relating to their analysis on why the markets are “…a forward looking mechanism and are beginning to price in the recovery from being locked-down…” I grow more and more disturbed.
The reason for this is out of sheer frustration that much of this so called “insight” is nothing more than narrative drivel. Period. However, the real issue that irks me to my core is the amount of damage this will inflict on those that not only listen and believe, but then believe themselves to be “informed” and argue accordingly. i.e., regurgitate said drivel with vigor.
Regardless of how one feels about the so-called “markets” currently (that would also include yours truly) I feel there’s still a need to continue expressing my observations since I made what many have called “Are you f’n serious?!” call. So here in my latest for those that want to know. To wit:
What I want to say about the so-called “Sailing ahead to new highs!” rally that we’ve been experiencing from the prior “Oh my Lord it’s the end of everything!” collapse the myriad of “experts” never saw coming (unlike you dear reader) is the following…
What I would like to point out is what I’ve been trying to make others understand since it began, i.e., This is nothing but a relief rally, pure and simple. And once it’s over – it’s going to be OVER. So don’t get fooled. I could be wrong, and I hope I am, but from a pure technical aspect – this “market” is following what some might call “text-book movements.” And that in and of itself is quite alarming, for that means it portends what I’m calling for caution about.
The above is a chart of the S&P 500™ represented via 15 minute bars/candle increments. I took it at the opening of the cash market today. What you’ll see are different shaded areas. What these are are different Fibonacci sequence patterns. The reason why I’ve used them is because they are one of the most rudimentary analysis indicators used for gauging price movements. It doesn’t matter if you understand them or their usage, I do. And what I would like to draw your attention to is the little dark blue box on the right hand side.
The reason I want you to focus there is for this very important reason: That area represents what even the most novice technical newbie would understand – for its the most basic retracement area one would expect before a resumption of the dominant trend that created it, which for this example – is down. Again to reiterate: this is what is known as “A text book example.”
I have argued over, and over, and over again that it was not just possible, but probable we would retrace somewhere between the 50% and 61.8% before this so-called “new rally to the stars” was complete. The arrow shows you precisely where we now are, because that little box represents exactly that area.
Will it go higher? Could, just remember, there is no holy-grail and no one knows for sure. And if someone says “They do!” Don’t just walk away, but run and fast.
However, with that now said, from a purely technical perspective – all of the most commonly acknowledged highest odds of probability have now been satisfied, i.e., the math. And you would be quite prescient to remember these “markets” no longer run on human emotion, but by machines programmed via mathematical equations to mimic it.
It’s now all about how they see it.
Presently we just have to sit and wait. But I don’t think it’ll be much longer for some type of hand to be tipped. Remember: this is a big earnings week along with the Fed conclave.
What could possibly go wrong?
© 2020 Mark St.Cyr