1) Check out the retrace from the narrow range of 328.5 - 328.8... Lines up w/ from this year pretty well.
2) Daily (light blue line) is diverging and falling fast
3) Daily shows divergence
4) Current round of Fed repo expires Jan 14, China signs trade deal Jan 15, all the ingredients for selling the news are there...
5) Minor show that we're probably about to finish wave (v) of 3. Given 2 looks like a flat, 4 will likely be a steep correction.
6) I drew for SPX (not shown here) forecasted a low around the 1st - 2nd week of February.
7) First target is the .236 retrace around 315. Ultimate target the .382 retrace around 307. Will scalp calls at these levels.
My guess is Fed panics and brings back repo when the market starts collapsing when their starts shrinking.
May or may not try to snipe the sell target, always better to wait for confirmation on a break below the 1/2 or 20 . Even better if it looks to be correlated w/ news that the Fed intends to trim their .
I thought the Fed's whole excuse for ballooning the balance sheet by 1/2 a trillion was due to "year end tax considerations"? This wk liquidity demands have been GREATER than prior to the end of 2019. Now news has it that Fed is considering lending to hedge funds to stave off the repo issues.... What could go wrong?
Pretty irrational move considering earnings are right around the corner and now all cyclicals will have to basically factor existing tariffs into guidance for at least 2 more quarters. Sorry, but I thought the whole point of the trade deal was to alleviate tariffs? Instead the market creamed their pants because tariffs that were never implemented... didn't get implemented. I guess 1+0=2?
If this rally keeps stocks elevated I'm gonna short the piss outta some cyclicals when it comes time for earnings.
Still hovering around my target, let's see what tomorrow holds when the deal actually gets released.
--> Current round of Fed repo expires Jan 14
(*) Meaningless I just found out as they are rolling shorter duration treasuries so it mutes the reduced participation in REPO
I think it throws an exhaustion gap tomorrow, goes down for a couple of days, then rebound Friday then melts up until the end of the month.
I don't think we're done yet.
I think we get sell the news after the CHina deal gets signed.