ATHs are meaningless to a functional trader. Structure and Profile has far more to it than Higher Highs.
The Divergences have never, in the history of the Equities Markets, been this extreme. Never.
We can see Longer term indicators beyond the DOW Transports which clearly align within the numerous indicators demonstrating the widest negative divergences ever.
These have been Divergence warnings during 2007, 2011, 2015, 2020 and now - 2021.
The Magnitude of each has been interesting:
The Scope and Scale of each Daily Divergence is highly correlated to the percentage retracement with only 1 exception.
2007 - 56% decline - Scope / 86 weeks of DIV - Scale 2011 - 16% decline - Scope / 16 weeks of DIV - Scale 2015 - 12% decline - Scope / 60 weeks of DIV - Scale 2020 - 32% decline - Scope / 47 weeks of DIV - Scale
2021/2022 - TBD and yet it has exceeded the 90 year cycle Highs
In March of 2022 we will have completed the 90 year Cycle.
Will it be the onset of a wider and more pronounced and obvious Global Economic Contraction?
Or is it front run?
I believe it will be front run in dramatic and very violent fashion.
It will depend on Confidence, which is waning dramatically, we are seeing this in M1 - a dramatic decline in Consumer purchases.
Factories around the Globe are being shuttered.
It follows the pattern Samsung exhibited in 2019... almost perfectly. Review the 2019 10Ks and 10Qs.
I find it remarkable M2 is most often cited as the Security Blanket for Bulls.
Yet, they ignore the collapse in M1/M2 Velocity.
Remarkable.
HK_L61
⋅
RISK
Risk Profile has been reduced due to the tamping down of Intra-Day Volatility.
This is observable within the VIX Complex as the ALGOs complete the Gap Fills
on both CASH/SPOT VIX and VX CURVE.
Wall Street always gets their Fill.
Period.
We see C/S VIX @ 14.20
We See VIX Curve fills 15.50 with Daily extensions in the larger weekly Sell to 12.30.
*** The larger issue the VX vs Indices, the divergence of Volatility is reaching Extremes as
well. the ES YM RTY should be far higher based solely on VX, they are not.
WHY?
Financials?
Yes, in part as NQ Bank has been in a prolonged struggle with Price.
In Whole, IF we observe the 11 Sectors SPYDRs - they are a complete mess as well.
The ALGOs were able to collar Market Breadth to provide support to these failing
ETFs and stabilize them, they did not induce participation on Volumes of either
Scope or Scale.
A weakening Profile across Sectors as well as an increasingly Poor Market Structure.
A larger "out of Balance" Skew represents far higher Risks as Traders often forget...
Winners are SOLD FIRST.... always. Winners have liquidity, far more, on a relative basis.
Cathy Woods is a prime example of the Liquidity Trap she has set over and over again
within the ARKK Innovation Fund. Review her history there, or simply find it here, it's
been posted... ARKK is a prime example of what has transpired within the undercurrent
of Independent Producers - ie. Small/Micro Caps... Buyers become the EGG-People.
The next Section will observe the Geo-Political landscape and underlying contraction
of the Global Economy as well as Exothermic and Endogenous Threats ever-present.
IN addition, it is important to discuss the tipping of the Boat at the Federal Reserve,
Bank of International Settlements and the Euro-Zone's complete failure as a Monetary
Union.
HK_L61
⋅
@JRML115847,
Further RISKs
Price Inflation with collapsing Velocity of Money - doesn't square. It is 180 degrees of behave Inflation "Panics" - Consumers POR is a wholesale flight to buy anything and everythign of perceived Value.
Wage Inflation not keeping up with Price Inflation and as long as the Fiscal Policies are present, WHY WORK when you can live on the Govie Dole. Problem is the Republic of the Dunce becomes exactly that - A Banana Republic.
Money Supply remains expansive while Velocity implodes, FEAR.
Money participation in circulation - Credit Cards aka Revolving DEBT is being choked off by Banks.
Housing bubbly fronts run the Homeless pandemic.
China Regulations are choking off US Participants. CHINA First policies well under way.
China Yuan/Renminbi Adjustments provide the ultimate hedge when you are NOT the World's Reserve Currency. You may have 2 prices, one for China and one for the rest of us outside of China.
Delta Variant - Fastest ROC in New Cases being reported Globally in many countries, with efficacy of prior VAXs in question. Israel round 3 of Maxi Vaxi with the highest rate of issues surrounding vaccinations.
Semi-Conductors: A shortage of everything.
South China Sea - the largest staging of Warships and Assets in a very long time. What could possibly go wrong there. China wants Taiwan back... Why APPL TSLA AMD and many others including INTC are in FAB UP Mode, but with limited results until 2024.
Margin Debt remains below highs on a relative basis, and yet brokers who are unable to balance settlement permit father expansion of the Robin.HODlers - the most manipulated group of Retail Investors in Human History.
Jackson Hole's deviants will be crafting the Monetary transition to Digi Script not currency, simply an endless stream of Chits for those Kissinger deemed the useless eaters. One must wonder how long that experiment lasts as people HOARD DOLLARS.
Collapse in CONfidence in Government into 2022 has already begun, Boss Biden same as old bosses only far more delusional, decrepit and dysfunctional. Harris got the call from the CFR and was shocked after receiving 2% of vote in primaries - but thrilled to have been invited into the room.
Another useless idiot, puppet - agenda setter in a declining CONfidence Environment.
Yet, they ignore the collapse in M1/M2 Velocity.
Remarkable.