Interim Market Update Sept 17, 2022

[Yodean]

*****

Look! A broadening, megaphone bottoming pattern on the 60-minutes. Also positive divergences with RSI & MACDs. To the moon, baby! The ROAR (Rally Of All Rallies) is all but assured, starting soon.

Or maybe not. Remember, I don't take technical analysis too seriously.

[SOL]

Bullish sentiment 14
Neutral 23
Bearish 63

Based on the above sentiment readings and the short-term technical picture, the markets are primed for a relief rally. Any small positive news should serve as a trigger for a powerful rally. Note that TLT rallied yesterday.

[Yodean]

Bullish sentiment 14
Neutral 23
Bearish 63

These readings are somewhat similar to recent June lows.

[MarkD]

On a daily basis I review breadth indicators. Note the similarity between the hilo index on the Nas vs the June/July period. NYSE has a similar look.

https://imgur.com/sX1aMON

[SOL]

Bullish sentiment 14
Neutral 23
Bearish 63

These readings are somewhat similar to recent June lows.

The Bullish sentiment was lower than in June, and I am almost sure the bearish sentiment is lower. June low for the bullish sentiment was 16, I can't remember off the cuff what the bearish readings were, but I think it was not higher than 60

[jonnyfrank]

The problem with the "positive news" is that the media is not geared up to deliver it. So, we should not short and a relief rally has been coming for a while now. Hmm. I would like to buy it, but I ain't. Perhaps this bearish and cynical post will serve as the ultimate indicator of.....?

[LoriPrecisely]

The problem with the "positive news" is that the media is not geared up to deliver it. So, we should not short and a relief rally has been coming for a while now. Hmm. I would like to buy it, but I ain't. Perhaps this bearish and cynical post will serve as the ultimate indicator of.....?

Is there any positive news?
With the 'nuclear' word being thrown around now, it looks like more bad news may be on the way.

[bpcw]

Markets climb a wall of worry.... well until they stop climbing a wall of worry!

[Yodean]

The problem with the "positive news" is that the media is not geared up to deliver it. So, we should not short and a relief rally has been coming for a while now. Hmm. I would like to buy it, but I ain't. Perhaps this bearish and cynical post will serve as the ultimate indicator of.....?

One way to use news is to try to find discrepancies between a specific sector or stock and what the price action does on a closing basis - divergences, if you will.

So let's use my favourite example: Skynet. It's been taking a horrific beating, like many others, and overall its charts look fairly terrible. So it's bottoming, most likely, but what's bottoming can keep nosediving, as you know.

So besides technical analysis, overall sentiment analysis, COT for tech/"risk on," etc., I look for divergences.

Skynet closed a bit up today - if there were some really negative news that came out today on Skynet in conjunction with this close, it would often mean we are near a turning point of sorts - i.e. Google is about to go back up.

This isn't quite the divergence between news and price action on Google that I was looking for, but it comes fairly close - you tend to see these types of articles published near bottoms, as long as the price of the stock closes higher when the article is published:

*****

5 Red Flags For Alphabet's Future

Motley Fool - Thu Sep 22, 8:00AM CDT

Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL), the parent company of Google, is generally considered a stable long-term investment. However, it's lost nearly 30% of its value this year as investors fret over the slowing growth of its core advertising business. Rising rates exacerbated that pressure by driving investors away from the tech sector.

Many investors will argue that Alphabet is still an evergreen investment. That might be true, but investors should still be wary of these five bright red flags that could throttle its near-term gains.

https://www.barchart.com/story/news/103 ... ets-future

*****

[jonnyfrank]

It appears the news cycle IS impacting the markets. And it appears there is a time to short. And it appears that bonds are in the tank since the sky seems to be the limit on interest rates.

What are the thoughts related to the impact of Japan's move?

[Yodean]

It appears the news cycle IS impacting the markets. And it appears there is a time to short. And it appears that bonds are in the tank since the sky seems to be the limit on interest rates.

What are the thoughts related to the impact of Japan's move?

News is usually quickly baked into the price action of a particular stock, assuming _liquid markets_. All bets are off in illiquid markets. Once liquidity returns, prices quickly reflect the news.

In the short-term, there could be the appearance of news affecting price action. Usually those extreme gains and losses are given back within a few days to weeks.

Japan's move is part of the USD Black Hole or USD Dollar Milkshake playing out as we speak (6 minutes):

https://youtu.be/xxzy3sLs4Bs?t=9

*****

Japan, EU, and especially the emerging markets with significant USD-denominated debt are screwed, big time.

In Japan's case, the government recently moved to defend their bond markets by setting an unlimited bid for their own bonds, in order to cap interest rates.

But by doing so, they sacrifice the yen. Hence the nosedive by the yen recently. You can't artificially defend your bond markets this way without sacrificing your currency.

It's one or the other - there is no middle ground.

So now, the BOJ is back to trying to support the yen a bit. But then, their bonds are screwed. And so forth ...

King USD reigns supreme.

[jonnyfrank]

So with the dollar being "king", which investments do you suggest one takes a long hard look at? You know, investments that do well in such a dollar king environment?

[chippermon]

What are the thoughts related to the impact of Japan's move?

Temporary. The moves of intervention or perceived intervention by BOJ will not make much difference. USD on a tear right now. Too strong for BOJ to control.

Trade the AUDJPY, CADJPY, CHFJPY if you need more stability.
GBPUSD awesome right now.

My thoughts anyway

[chippermon]

It appears the news cycle IS impacting the markets. And it appears there is a time to short. And it appears that bonds are in the tank since the sky seems to be the limit on interest rates.

What are the thoughts related to the impact of Japan's move?

News is usually quickly baked into the price action of a particular stock, assuming _liquid markets_. All bets are off in illiquid markets. Once liquidity returns, prices quickly reflect the news.

In the short-term, there could be the appearance of news affecting price action. Usually those extreme gains and losses are given back within a few days to weeks.

Japan's move is part of the USD Black Hole or USD Dollar Milkshake playing out as we speak (6 minutes):

https://youtu.be/xxzy3sLs4Bs?t=9

*****

Japan, EU, and especially the emerging markets with significant USD-denominated debt are screwed, big time.

In Japan's case, the government recently moved to defend their bond markets by setting an unlimited bid for their own bonds, in order to cap interest rates.

But by doing so, they sacrifice the yen. Hence the nosedive by the yen recently. You can't artificially defend your bond markets this way without sacrificing your currency.

It's one or the other - there is no middle ground.

So now, the BOJ is back to trying to support the yen a bit. But then, their bonds are screwed. And so forth ...

King USD reigns supreme.

Excellent video Dean. Everyone should watch this twice to really soak it in. USD unstoppable. The only way it stops is if the PTB let it and make no mistake they will if it is to their benefit but only temporarily to gain more control.

[xkosmox]

Gotta say that i was pretty calm before last week's drops and even I am feeling some bearish sentiments now Hopefully the last drops before the rally and then the big drop!