Good morning from Nice, France. Today is day one of the world famous Nice Carnaval, a 16 day party that engulfs the center of this gorgeous town in the heart of the Cote D’Azur, the French Riviera, and my first as a resident of France. It shouuld be fun.
Meanwhile, Wall Street’s party looks as though it has ended, with partiers heading for the vomitorium, to disgorge the fruits of their years of excess consumption.
In the very short run, the daily squiggles we watch here at the Stool, things are looking up. The 5 day cycle low appears to be in place. 4460 looks like a solid sport level. The price pattern over the past 24 hours sets up as a base, with the top line around 4495. Clear that, and the base breakout would have a measured move target of 4530.
First they need to break the downtrend channel, whose top line is now around 4515 as of 7-8 AM in New York. That drops to 4505 at the open of regular trading. If not cleared, then we have a possible crash setup. If cleared, the next target aside from the measured move, would be a band of resistance around 4530-40.
The purple line, by the way is Buttcoin (BTC). For months, it was leading the market. As soon as I noticed, it stopped doing that.
Mofos.
For the big picture this week:
Meanwhile, we had YABO, yet another breakout, in bond yields yesterday. The 10 year crossed the Rubicon at 2%. It surged a little past that, but has now pulled back. 1.935 is yield support today. If they stay above that, this uptrend will remain extraordinarily painful for bond holders, who are being robbed both by inflation, and by capital loss. Those that are leveraged are facing Dante’s Inferno, and the margin man leg breakers with tire irons in hand.
Chart resistance in the very short run is around 2.085. And if they break that, then we’d be looking at 2.25. That’d leave a stain in the pants of bond longs, not to mention maybe break a few Primary Dealers. They’d have some huge losses. Oh the humanity.
Get the rest of the story here:
Fed Gets the Inflation It Wanted, But Wait There’s More!
Meanwhile, Gold continues to try our patience. Common sense says that this should end well for gold bugs. But cold eyed analysis says, “Eh, I’m not sure.” We’ll see. This chart looks slightly constructive. But we won’t know for sure until it breaks out. If it does, it has a nice base that should support a big move.
Of course, the same holds true if it breaks down.
I do have 7 buys on from the gold stock swing trading screens. And I set out what to look for to show us the way here:
I live in Europe and earn my living in dollars. I will soon be buying a home here, having just sold my Florida property. So when to move the money, and when to hedge my income, are always on my mind. The doodah/geuro price hangs in the balance here. It’s a question of relative tightness. Who will be tighter Lord Jaysus, or Madame Lagarde.
If this thing breaks through 1.15, I need to get long geuros in size and fast. If it drops under 1.135, I’ll stay in doodahs.
Meanwhile, if you’re looking for swing trade ideas in stocks, short or long, check this out.
The system kept us on the sidelines for the past two weeks, which was probably a good thing, because the market has been a meat grinder.
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