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Comments on Financial Culture: Long live Markets. Discounting often trumps expectations. Fed Rises are Bullish? Stranger things can still happen this summer. Central Bankers don’t understand. This is a beginning Recognition of a major shift. Profiles remain for a potential initial equity extreme in Q4. Jerome, our Jesuitical Rate riser has really gotten religion? “The History of Interest Rates,” by Sidney Homer shows that rate cycles can last more than decades. They rose for 100 years back in the Roman times! Since we are starting at zero, there is still plenty of room for rates to rise, over time.
Meta Market Semiotics: Inflation & Rates Rises have not peaked. Investors This Market War, remain on an uncertain battlefield.
EQUITY STRATEGY: Stocks still in a correction. The structurally foolish ‘Lapdance of Liquidity’ initiated an Inflation which, while now known, is far from over. Q4 has the best potential for an interim corrective nadir. Wars never end well nor will 2022. An elongated corrective even sideways process is due.
EQUITY TACTICS: Stocks made a low on 0% bullish. Bounces suspect.
GLOBAL EQUITIES: Remain troubled. Bounces not important yet.
FIXED INCOME: Expected secular “Bull Trap” continues. No surprises.
FOREX: Dollar reversed. Still at risk. The pattern for a Fall Fall is brewing.
COMMODITIES: Markets “Know” all about Inflation? But do they? No. “It isn’t over.” Everybody wants Stuff. Crypto: Q4 low.
ENERGY: Still has a Bullish bias. In fact, there is a profile for another hard run this Fall. Be aware of that.
EQUITY SENTIMENT: The Bullish Complacency of the last few years has been abandoned as inevitable realities emerged. Sentiment has taken a big hit but that does not mean markets are near any kind of an extreme. There will be Bounces but an identifiable low awaits.
QQQ Weekly: The Tech Correction was wonderful, and it is now having a wonderful recovery. The scale of this correction was profiled to be of a secular degree. Bounces to date have all resolved into renewed weakness. Thus, this recovery will likely also succumb to yet another bearish probe.
GLOBAL EQUITY STRATEGY: German Equities had a wonderful correction. From a classic double bottom, the beginnings of a recovery bounce are happening. Still, Q3/Q4 remain due to be negative. So, beware of the potential for some downside surprises in the fall.
Volatility: (VIX) Profile: The VIX remains nominally congested. Yes. it has retreated into its extended basing. But Uncertainty isn’t going away. The profile remains for a potential Fall explosion.
TACTICAL SENTIMENT: The DORSEY Market Sentiment had been complacently high bullish for years. The overt weakness generated a mini panic with 0% sentiment readings in Mid-June. Big bounces occurred from there and stocks now all seems pretty good? Not really.
EQUITY PROFILE: The IWM index continues to be a mirror of equity appetite. The recoveries here have gone nowhere important even though they feel good. Strength probably just, as allowed, could become Summer ranges. Here we are. Summer ranges.
FIXED INCOME STRATEGY: Ho Hum. ‘Rates Rising for Decades!’ Obscene Liquidity was, structurally negligent. First-rate high remains due “near 2024.” Global Central Bankers are now all playing along. I had advised: “Rates going to 3%-3.25%. Inflation is Real.” It all happened. Yes, Rates just got discounted but the rises aren’t over.
FIXED INCOME TACTICS: Treasuries have had quite a recovery bounce for a few months. So what. It has been a great case of discounting what was assumed. The trending function to higher rates is not over. TLT is near resistance. Talking Heads have become bored.
GDX Profiles: Inflation, as allowed, has continued to be a significant macroeconomic factor. Precious Metals profiles have been generically bullish, but they have not been responding, until now? Gold has been overdue for a hard rally. Has the strong potential for a rally into this Fall arrived? This is the time.
FOREX DIAGNOSIS: The Dollar did have a spike reversal. There has been a conceptual torque in the global tightening gambits. Rising Rates are not the only factor. The profile prefers a Fall Fall for the Dollar.
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