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COMMENTS ON FINANCIAL CULTURE: Global Liquidity has abdicated its throne to Inflation. Liquidity has worn out its welcome. Central
Bankers and Financial History is moving on, as it always does. Now, to reiterate my view: “What if this is the beginning of a Hyper Inflation! “Pandemic Denial about Everything Bearish remains operative. Uncertainty never reveals itself until after it is obvious. It never pays to blithely Believe in what you are constantly being told by talking heads. The Obvious is almost beyond obvious.
The Market Scape: Complacency never seems as bizarre as when it is viewed in hindsight. So, we wait? Rate Rises were are still only a matter of time until they matter. The “Covid,” phenomenon will keep morphing into more deniable uncertainties? Can Inflation get Hyper? Yes, it can. Markets can crack
EQUITY STRATEGY: The pattern has always suggested an important pullback to start later this year. Here we are late in the year but not late enough. The next interim low is due into February/March in 2022. The ‘Lap dance of Liquidity’ is ‘Transitioning’ into a ‘Transitory’ inflation, with a Hyper twist?
EQUITY TACTICS: Stocks in Seasonal bounces as allowed, short term.
GLOBAL EQUITIES: Continued congestion B4 down into early 2022.
FIXED INCOME: The expected secular “Bull Trap” continues.
FOREX: Dollar remains ranging after failing from Resistance.
COMMODITIES: Commodities “Knew” Inflation was coming. As noted: “Crypto still has ‘Whoosh Risk,’ to the upside.”
CRUDE: Profiles remain bullish. Panic Buying Possible?
GRAINS: Are structurally bullish but face Harvest.
EQUITY SENTIMENT: Complacency not only continues but has robustly recycled up. Why? Folks love stocks. Sentiment still warns of an eventual comeuppance. It is cautionary. The inference may simply be that it just takes more time for Reality to Act up & Act Down?
S&P Daily: The stock market is strangely charged by waning Liquidity gambits. Is it Déjà Vu Voodoo? A typical seasonal topping process is unfolding with all the bells and whistles. unfold. These are expected “rally attempts into Thanksgiving.” But, why are they serving Goose?
TACTICAL SENTIMENT: The DORSEY Market Sentiment has continued to generate high bullish readings. Is this just more, strange, toxic complacency? This upside episode is a surprising, but it does fit with seasonal price profiles. Cogent negative memes can recur any time.
DAILY EQUITY PROFILE: The Russell (IWM) continues in a quizzical rectangular range. This consolidation will be resolved by a breakout. Repeat: “Yes it could still weirdly tease on the upside,” But the interim negative pattern due into early 2002 will overcome that.
GLOBAL EQUITY STRATEGY: German Equities executed a well-defined topping process. But it has bounced hard from tactical support. The Dax has basically been congesting for several months. Yes, it can still show some seasonal strength this Fall but not much more.
Volatility: (VIX) Profile: VIX is still simmering and whimpering. It is continuing to hold extended structural Support. Uncertainty can never be perpetually out of season. Everything Changes Eventually.
FIXED INCOME STRATEGY: Repeat: “Rates Will Rise for Decades.” Obscene Liquidity was structurally negligent. An initial interim rate high is due in 2024. Central Bankers played the only game that they thought that they knew how to play. Rates are headed for 3%- 3.25%. 2022 could become dynamic. Inflation is far from transitory.
FIXED INCOME TACTICS: Treasuries continue to grind lower in tune with their inevitable destiny. The current process to higher rates may begin to accelerate in coming months. Talking Heads will keep playing taper talk games. Don’t’ be surprised by any Taper Tantrums.
CRUDE OIL STRATEGY: Crude has had an amazing rally from early 2020. I had allowed how bullish the overall profile was. Repeat” Commodities are structurally open to much higher prices. This could turn out to be an Inflation like no other.” There is no denying Energy is still explosive. Crude strength is a tell for a Hyper Inflation.
CRYPTO: Bitcoin Weekly: Bitcoin had a wonderful setback into profiled Mid July low. There is ‘Whoosh Risk’ in this asset class. I suggested last month to allow for Fall strength. Here we are. Profile prefers some shaky trade next few weeks B4 further bidding into Q1, 2022.
Precious Profiles: Profiles suggested and allowed for structural reflation to continue to be a dominant factor. But Precious Metals have been relatively underwhelming relative to other hard stuff like Copper and Aluminum. Reflation isn’t over but may simmer. Q1 may be Hyper. Gold still positive here
FOREX DIAGNOSIS: The Dollar continues to congest and confuse. It has rejected Key Weekly resistance. It still looks like the range highs will prevail, as was preferred. So, allow Ranges to continue.
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