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Ugly Head 2/22/21

This is a syndicated repost courtesy of Stool Pigeons Wire at Capitalstool.com. To view original, click here. Reposted with permission.

And shoulders over 3 weeks. Completed, and busted. The thing measures to about 3805. The 5 day cycle projection points to 3855-70.

The right shoulder is slightly higher than the left. I can’t remember the last time one of these, with a right shoulder higher than the left, broke down and led to a big decline. Even 3800 would surprise me.

Here at 4 AM ET, they’ve coming off a support convergence. The hourly oscillators got Dover Sole, so I’m gonna say that was the cycle low, subject to a test with a positive divergence within the next 6 hours.

Click to engorge. tvc_7852d9b1e1a9196a31bc5e0e64389440.png

 

Quelle est la raison du jour for this morning’s selloff? The meltdown in the bond market is bringing collateral call pressure. The 10 year is now 1.37.

The media is partly correctly blaming the bond market. But they are wrongly blaming rising yields, when the proximate, direct cause, is falling prices> Yields are the mirror of that, for sure, but they miss the point. Falling prices are triggering margin calls, leading to more falling prices, leading to contagion, as dealers and leveraged longs sell whatever they can to raise cash.

This could spiral out of control.

Skating on Thin Ice, Keep Life Preservers Handy

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Lee Adler

I’ve been publishing The Wall Street Examiner and its predecessor since October 2000. I also publish LiquidityTrader.com, and was lead analyst for Sure Money Investor, of blessed memory. I developed David Stockman's Contra Corner for Mr. Stockman. I’ve had a wide variety of finance related jobs since 1972, including a stint on Wall Street in both sales, analytical, and trading capacities. Prior to starting the Wall Street Examiner I was a commercial real estate appraiser in Florida for 15 years. I was considered an expert in the analysis of failed properties that ended up in the hands of bank REO divisions, the FDIC, and the RTC. Remember those guys? I also worked in the residential mortgage and real estate businesses in parts of the 1970s and 80s. I have been charting stocks and markets and doing analytical work since I was a teenager. I'm not some Ivory Tower academic, Wall Street guy. My perspective comes from having my boots on the ground and in the trenches, as a real estate broker, mortgage broker, trader, account rep, and analyst. I've watched most of the games these Wall Street wiseguys play from right up close. I know the drill from my 55 years of paying attention. And I'm happy to share that experience with you, right here. 

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