Shallow Thoughts
Those Fed guys are so funny.
What a bunch of bullshitters. Here’s Why Fed’s Statement On Cutting Repurchase Operations Is Total Bullshit
Today’s trading setup is below. Follow my Deeper Thoughts, with tips on how to preserve, protect, and defend your investment and trading capital, at Liquidity Trader.
Market Trading Setup for Tuesday, April 14, 2020
Hourly ES S&P 500 Futures Chart
The S&P ES fucutures are very strong this morning. They are attacking the top of the recent range and are solidly in the upper half of a two day uptrend channel.
The prior hourly peak was 2816. At 9 AM in New York the futures were at 2805. Initial hourly support is around 2780.
Hourly indicators tuned to a 5 day cycle frequency are only slightly bullish. A breakout should generate acceleration. But a downturn could lead to a big move as well. We’ll just have to see what the verdict is. The 2780-2816 is the no decision zone. 2824 should also be trend resistance. A breakout either way should generate a run.
Reminder- I’m only talking patterns for a day here. This is not the big picture. If you want that story, you must subscribe. Risk free trial and all.
S&P Futures Daily Chart
The daily chart gives a broader perspective. The futures have been traded between 2753 and 2808 overnight and in the pre market. The current price of 2805 is slightly above the 50% retracement level of the March crash.
The daily range is within the meltup channel from the low. The bottom of the channel is at 2690 today. The centerline is at 2850. That would be the first target on a continuation higher today. The top is at 3025. Before that comes into play, the market would face resistance at 2820 and around 2860-2885.
Rate of Change and MACD tuned to an 8 week cycle remain very bullish. So the benefit of the doubt still goes to the bools here.
Again, this is for the perspective of one day only. The purpose of these reports is not to divine the longer term. If you want longer horizons, join me at Liquidity Trader.
S&P Cash Index Hourly Chart
The red bar at the far right shows where the futures traded overnight. It’s between 2753 and 2808. Resistance is indicated at 2824-2850. If that’s cleared, the next resistance cluster around 2925-50 would be the target.
Support is probably around 2755. That would need to be broken to end the 5 day uptrend.
The 5 day cycle oscillator was heading down yesterday afternoon. It will open on the buy side. It has been lagging too much to be useful. 
Join me on the Capitalstool.com message board today and I will update you there occasionally during the day. Feel free to join the “fun.”
“And that’s the way it is, Monday, April 14, 2020.”
From coronavirus locked-in Zagreb, Croatia, good morning!
Where have you gone Walter Cronkite? Our nation turns its lonely eyes to you.
Meanwhile, here are the latest reports from Liquidity Trader.
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What happens this week could tell us whether we’re in a bull or bear market.
As of 4:15 AM ET on Monday, virtually all of Thursday’s market gain has been wiped out. The S&P futures were trading at 2742, which would put the S&P cash index back below the centerline of the trend channel. Bears would have a foothold, but it’s where Monday finishes that matters, not where it starts.
Here are the critical parameters and levels you need to know to be positioned correctly.
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Federal tax collections are collapsing but the US Treasury now has $827 billion in cash in its bank account at the Fed. This is double the previous highest level ever. This money has all come via debt sales over the past week.
The Fed funded every single dollar of that expansion through its purchases of the Treasury debt. The Fed used Primary Dealers as middle men. The dealers collected a nice skim and the Fed monetized the debt, while being able to claim that it didn’t. But this is money that did not exist two weeks ago. Now it does.
This has frightening implications. Here’s why, and what you should do about it.
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Treasury issuance will go through the roof over the next 5 days while the Fed has decided to cut back its support. That’s a bad combination.
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