Yesterday, fxfox said:My guess: Due to the move in yields, hedgies blew up and had to sell stock and other assets to meet margin requirements
I bagan forecasting this two months ago when I became aware of the enormous, record hedge fund short position in the 10 year prior to the suspension of the debt ceiling in June. I warned that the markets would crack if yields started moving higher, as I concluded that they eventually would.
It has taken a bit longer than I thought, but if we’re disciplined, we stick to the TA and it will get us positioned correctly soon enough to profit from the next big move.
In terms of the daily patterns, yesterday was a rogue wave that broke the recent cyclical pattern. Somebody dropped a big boulder in the pond, and I don’t know whether the recent cycle pattern is strong enough to return to normal now or in a few days.
Watching the hourly ES 24 hour S&P futures, the key will be what happens as the market approaches wave resistance in the 4555-65 area in the pre market and after New York opens. If they clear it, the next target would be around 4580 this afternoon.
If they roll over instead, then watch what happens at 4527.6. Breaking that on an hourly close would complete a top with a conventional measured move target of around 4450-55. Could get there fast. I don’t think that that will happen yet. Market has been conditoned to BTFD, and that should hold for the first try.
For moron the markets, see:
- Gold Marks Time July 26, 2023
- Full Load of Longs, But Adding 2 Shorts July 25, 2023
- Market Looks Poised July 24, 2023
- Correlations Don’t Matter Until They Do, Like Now July 23, 2023
- Swing Picks Following Gold’s Yellow Brick Road July 18, 2023
- Finally, A Few ShortsJuly 17, 2023
- Young Bull Growing Stronger July 17, 2023
- We’re Not There Yet July 16, 2023
- Stocks Are Scraping the Ceiling July 9, 2023
- Withholding Tax Rebound Sets Up a Bearish Fed Catch 22 July 6, 2023
- Golden 13 Week Cycle Turn and Other Hopeful Signs 7/5/23 July 5, 2023
- It’s Not Your Daddy’s Liquidity Anymore July 5, 2023
- We Now Know What is Driving the Rally June 20, 2023
- The Fed’s Slush Fund is Working June 16, 2023
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