Yes it ticks me off. I had been warning about the buildup of leverage for months. Now that the inevitable unwinding has begun we’re starting to see the usual after the fact explanations. Where were the @WSJ and @CNBC when these problems were building up over the past year.
Meanwhile, I was warning in June and July that the banking data was telling us that the markets were overstretched in terms of leverage. And before that, we watched the conditions build week in and week out for months. I was even able to forecast based on past ratio history that 5600 was a likely target on the S&P.
Here is my most recent report. I have an update in the works, to come probably on Wednesday.
But unfortunately for those who suffered massive leveraged losses, they don’t pay any attention to my work. Too bad for them. There’s another shoe left to drop.
The breaks generated by unwinding of leveraged positions go both ways. They outweigh typical cycle patterns on the hourly charts. Predicting what day the current rebound is likely to peak may be an exercise in futility as a result. Likewise there are a variety of cycle projections and they all point higher. On a 4 day cycle basis we’re looking at 5415. On a 5 day cycle basis the number could be 5430 or it could be 5480. The hourly chart of the ES shows resistance at 5365. If that’s cleared, next stop looks like 5400.
To get anything going on the downside, they’d have to break 5330, and then 5300. Otherwise no dice for bears.
For moron the markets, see:
- A Pit Oval Week Lies Ahead August 11, 2024
- Still Looking Up for Gold August 9, 2024
- Tax Collections Were Worse than the Jobs Report But… August 5, 2024
- Why Primary Dealers Net Short Fixed Income Is Now Bad News for Stocks August 1, 2024
- End Stage Hysteria Breaks July 24, 2024
- Picking Up Nickels in Front of a Steamroller July 9, 2024
If you are a new visitor to the Stool, please register and join in! To post your observations and charts, and snide, but good-natured, comments, click here to register. Be sure to respond to the confirmation email which is sent instantly. If not in your inbox, check your
