This market remains a fantastic trader’s market if you know how to trade chop in a disciplined manner and not let it affect your psychology. Despite not seeing any major drops or breakouts (remember the fake out and fake down theme) price continues to move in a rather predictable fashion, the latest being the typical OPEX ramp that we have now seen on a very regular scheduled basis:
Yet the news media went very much into excited mode when both the $COMPQ and $RUT made new all time human history highs this week. The tagged culprit? The ever dovish Janet Yellen who just can’t bring herself to ever raise rates:
But there is an inherent logical fallacy in Yellen’s message:
Yellen’s incoherent message: we’re data dependent but will be sure to raise rates only very gradually no matter what the data says.
— Northy (@NorthmanTrader) June 18, 2015
I’m temped to write a detailed post on just this subject, but I’m having a nice family day planned today and I do have a life outside of trading – imagine that! 😉
So instead I want to just leave you with some charts that make you go hmmm….
Now mind you, context is everything. Besides the national debt going from $1 trillion in 1980 to now over $18 trillion and buybacks being (ZIRP induced) at all time highs, all the charts I’m showing below have to keep the interest rate context in mind. Central bank rate policy gives the proper color as to what it took, and continues to take, to get markets to the stage they are in now:
And the reality: 46 central bank actions in 2015 alone. We must be in a full fledged crisis.
I’ll leave the detailed analysis for our member area, but I thought I’d share some of these charts here and leave the reader to use in their own analysis.
So without further ado and in no particular order, below are some of the charts that make you go hmmm.
10 year monthly ($TNX)
Transports weekly ($TRAN)
$SPX versus $VIX monthly
$SPX Bull vs Bear Asset Allocation weekly:
Greece remains unresolved, seasonally the next few days are a bit weak, but summer is coming fast, while rate rises are not.
Good luck trading next week!
Categories: Market Analysis