Technically Speaking Update - mytrbroadcast.com

In my last note, what I tried to convey were two things: first, that the “markets” were acting very technically, meaning starting from and stopping at levels that, from a technical analysis viewpoint, were notable. Second, if this was the case, then there were high probabilities as to how these actions might resolve over the coming days and weeks, and I noted this accordingly.

What appears to not be analyzed by most onlookers is the reason for the sudden reversal back towards making even more new highs before year-end. Hint: all bets are back on that the Fed will cut rather than skip doing so at the December meeting, as the Fed has been signaling just that over these weeks since the last meeting.

They (Federal Reserve) call this process of signaling “Forward Policy Guidance.” It is supposed to establish a somewhat clear viewpoint as to the intentions of the Fed for how it sees the economy and its relationship to it via policy actions, in order to give said “markets” a steady idea so they can react for the longer term and not be jolted into immediate front-running of anticipated actions. Hint: it’s a joke, and has been a joke, for a very long time. Yet, to prove that point once again in real time. You don’t have to take my word for it, Here’s Mohamed El-Erian pointing out this latest edition. To wit:

So what does this all mean? Well, as always, that’s anyone’s best guess. However, what I would like to add to this discussion are the “market” machinations that developed over the remainder of the day from my original post. Again, to wit:

Here’s my original…

And here is a zoomed in version, the difference being is it represented via one minute intervals.

What I would like to draw your attention to is just how responsive the pricing has been in response to both the lines I drew (e.g., red) as well as the lines I added depicting the shaded areas known as “Fibonacci retracement levels.” What this is signalling, in my humble opinion, is that the rise has been fostered on by nothing more than a technical short squeeze where the machines are doing nothing more than reversing positions in anticipation and within a liquidity hampered situation – not a new BTFD moment. Hence why I named these notes “Technically….”

And if The Fed disappoints? I’m afraid we’ll see not just a reversal, but something far worse.

As always we’ll see.

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