What I’m Watching – F.T.T.W.T.K.

(For Those That Want To Know)

As I sit here (Thursday, Noon’ish) the situation in Afghanistan is unraveling further into evermore dire circumstances. [Note: At the time of this writing there were few, if any, initial reports regarding the suicide bombings, let alone, the horrific aftermath.] Just how this debacle will resolve itself into the Aug. 31st deadline is anyone’s guess. However, as focused as many of us are, there is something else that is approaching a “deadline” that happens tomorrow morning at around 10:00am, which is when Fed. Chair, Jerome Powell delivers his summation for monetary policy going forward, via the now virtually held Jackson Hole encampment.

What I would like to draw your attention to is something I’ve been detailing over the past few weeks, specifically, what I’ve coined both as “The 4$Trillion line” and its latest machinations via the “monkey-bar effect.”

Be it may that no one is more acutely aware of how fundamental technical analysis has been decimated for effectiveness since the interventions of central banks more than myself. That doesn’t mean there are no longer any relevant machinations to be evaluated.

So, with that said, what I would like to point out is the following and the what/why I’m currently focused on it. To wit:


(Chart Source)


(Chart Source)

Above are two snapshots of the S&P 500™ as I’m currently writing this represented via 1hr bars/candles.

What I would like to draw your attention to are, first, those circles. The “markets” over the past four to five months have fallen deeper through that once impenetrable “4$Trillion line.” Each one of those just so happens to coincide, to the day, with expiry cycles.

Why this is interesting is because, every-time it fell through, it not only fell deeper, but also, seemed to be struggling to stay above it, until recently, the best it could do was what I highlighted as to “monkey bar” the line e.g., represented by the small red over and under curved lines.

But then, something funny happened on its way back to what used to be “bankable.”

It not only hasn’t been able to recover back to and over the line, rather, it is beginning to fall back away before it ever reaches it. e.g., pointed red arrow.

This is what used to be known as an “exhaustion point.” In other words: Everyone’s already in, buying has now reached an exhaustion point.

All I’m going to argue at this point is this: The “markets” are in, potentially, the most vulnerable position, ever, for Mr. Powell to make the wrong calculation, say the wrong word or something worse. And that’s not hyperbole.

Just for context: Every single metric that was an indication for signalling a top in market extremes, such as those that were precursors for: The Savings and Loan Crisis of the 1980’s, The Dot-Com bust of 2000’s, The Great Financial Crisis of of 2008 et. al. have not only been broken, but many have been shattered using exponential metrics.

There are so many that fit into this category it’s astounding, but to give one context, let me put it this way…

Let’s say, for example purposes, the worst a metric ever printed that caused concern was at 80%. If that same indicator was now at 89%, that would be a new record and should cause greater concern. However, what we’re talking now is something totally off the charts. i.e. That once printed 80% is now 150% higher than that. i.e. one and a half times higher than its highest ever! And all the while as it has gone higher and higher the entire mainstream business/financial media complex has been stating “Nothing to see here, remember, the Fed’s got your back!”

Well, that solves that, right?

So, currently, that’s where we are and that’s what I’m currently focused on concerning the “markets.” For those that want to know.

As always, we shall see.

© 2021 Mark St.Cyr

Note: This is not trading or investing advice of any sort. This commentary is for “big picture” discussion purposes only. Please read, or re-read the “About This Site” page for any questions or clarifications.