woman facing the ocean during day

Holiday Observation

Today, the U.S. “markets” are closed for the cash sessions in observance of Juneteenth. However, what I would like to bring to your attention is something I’ve been watching with distinct interest, almost to the exclusion of anything else. Below is the current and updated version of it. To wit:

First, the prior…

(Charting Source)

Now today’s…

(Charting Source)

As you can see I have elongated the black box upwards, but have left the width the same. Without going into a lot of detail for why, here’s the gist: Going higher as we have is still well within the parameters for the observation, but the time aspect (i.e., the width) is a bit more constraining as to hold the original argument together. Or said differently – If something’s going to happen, odds say “soon.”

Will it? Who knows, but that’s the running hypothesis at this moment. However, what I would like you to observe is the following that is a snap shot of the same S&P 500™ using the same time intervals as the above via the futures market as of ~8:30am ET today. Again, to wit:

(Charting Source)

What I would like to bring to your attention is the near precision of touching that upper line of the channel – then reversing. And for those that are not that astute in charting – I created that channel and have been watching it since April, well before I posited the one higher above, for It was this channel chart that prompted the other. Let me explain…

As you can see, the meandering through May and into June (what I coined “screaming sideways”) in conjunction with a host of other factors, was signalling a high odds that we may be looking at some type of event on the near horizon.

Then, just as this “market” has done with near 100% accuracy – it beat the odds of 99.9% and sailed straight up into the .1% for the win. What used to be considered unfathomable, is now the norm. Can’t make this stuff up.

For those of you who think “Well Mark, maybe you’re just not as good at this technical analysis stuff as you claim you are.” Or, “Mark, face it, you’ve lost your edge, just give it up.” I’ll just reply with, OK, maybe you have a point. But here’s something I would like to offer in my defense that was put up on Tim Knight’s, “Slope of Hope” web site, when I saw it, I nearly covered my screens with my coffee. To wit:

(Image Source)

For those that may not know, Tim is probably one of the top (if not actually) technical analysts and charting aficionados anywhere, barring none. He’s written more books, created highly successful platforms and more. I personally had the pleasure of posting my thoughts there a few years back. It’s a great site. But here’s why you need to both click on the above to enlarge and study it. Yes – study and why…

When I talk of “odds” and the comparison to the pejorative comments regarding “chicken bones” in relation to this stuff. What the above expresses are what are known as “text book” examples and the calculated odds for which such a pattern resolves in a certain direction once completed. e.g., 55% goes up, 73% goes lower, etc., etc.

What Tim brilliantly did was show, in an easy observation that most anyone can grasp, is the following…

No matter what the odds are: When the Fed is either actively printing or saving (aka perverting fundamental capitalistic processes, latest example Silicon Valley Bank™ et al) – UP is all there is. Period.

The above shows a balance of both up and down examples. But the ones that used to show odds for going down? (on the right side) As you notice he has (with a green marker) shown what this “market” has truly become: a parody of itself. Or, said differently – there is no down.

Well, that is – till there is.

Fundamental processes can be delayed, overrun, perverted, sidelined, constrained _______(fill in your choice here.) But what they can’t nullify indefinitely is: reality. For that “nullification” will eventually show back up in the charts.

The problem is in just how big of a pattern relative to proportion will it be when it does. (Hint: look again at red arrow.)

As always, we shall see.

© 2023 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.