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The 24 hour ES S&P 500 fugutures are maintaining the dead cat bounce that began late yesterday. The hourly chart shows that the short covering has carried the price to downtrend resistance at 3975 as of 7:15 AM in New York. The 2-3 day cycle projection points to a high of 4030, suggesting a breakout from the immediate downtrend but not the bigger multiday trend. The last high, set way back yesterday was 4055, and the one before that, set Wednesday was 4069.
So the bulls have their work cut out before they can claim success in putting in a significant low.
Meanwhile, if the bears can hold either here, or 3992, or 4000, 4010 or 4027, that would be really sick. Grab some popcorn and sit back for the late Friday show.
I don’t pretend to know how this will go. Those are the key levels. Rules number Two and One continue to apply. The trend is your friend, and Don’t fight the Fed. Big Tops Lead to Big, Bad Bear Markets
Meanwhile, the prices of other currencies in US doodahs, particularly the geuro, the doodah’s primary competitor, are plunging. The geuro seems destined to break this major, major sport level around 103 and set its sights on parity with the doodah. In fact, if this pattern breaks, the conventional measured move objective would be $0.81.
But currency markets have limits. Currency prices, like stock prices, are determined in the long run by what the central banks decide. It’s a matter of who’s printing more or less, relative to the other. The Fed stopped printing, and the ECB is still printing. As long as that continues, the geuro will continue to trend toward a lower price in doodahs, and versa vice. The price of doodahs will rise even faster against the geuro next month when the Fed starts withdrawing doodahs from the banking system.
This directly affects the European currency because 8 of the Fed’s Primary Dealers are European banks. That includes a couple of Brit banks with heavy presence on the incontinent. Catch a Falling Knife
In the Cryptonite space, Buttcoin leads the way with a holding action around the 30,000 sport line. All signs point to an eventual breakdown, with the next target around 21,000 in the course of moving toward the ultimate price objective of a negative number.
Here’s the weekly chart.
Meanwhile, over in the bond market, Treasuries have had a helluva rally in the past week, sending the 10 year yield plunging to 2.816. But that paused yesterday. If the buying subsides here, the yield should percolate back to 3.20, and then points north. Way, way north. On the other hand, if the selling panic in other assets resumes, expect money to roll into Treasuries. Then if they break that 2.816, I’d look for 2.60-2.65. It would be dramatic, but would not reverse the trend. April Tax Collections Still Running Red Hot Mean That Fed Must Get Tighter
Stay tuned for all the exciting action.
- Catch a Falling Knife May 11, 2022
- Buys Beat Shorts in This Week’s Swing Trade Screens May 9, 2022
- Big Tops Lead to Big, Bad Bear Markets May 8, 2022
- April Tax Collections Still Running Red Hot Mean That Fed Must Get Tighter May 4, 2022
- Time to Catch Gold Knives May 3, 2022
- The Fed is Tightening Into a Sheet Storm May 2, 2022
If you’re serious about the underlying forces of supply and demand that drive the markets, join me!
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