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Changes to Matrix:
Extending primary (monthly) database into 90's, 80's, 70's, 60's, and 50's. This increases the number of bull and bear impulse above 20 in many markets.
December 22, 2018: During the shutdown of the federal government, the Commitments of Traders report will not be published. When the federal government operations return to normal, CFTC will resume publication of the Commitments of Traders report.
The US stock market has rebounded, but the mark down phase may be far from over. Junk bonds (JNK), an leading intermarket trend provide direction for economic growth in US, stumbled three weeks ago. Subscribers follow key economic leading flows in line 79 and 80 of the Matrix. If you think the US economy is going to surprise with upside acceleration, you're listening to the politicians, not the market. The market is worried. As long as the market is worried and not buying stocks as a safe haven when confidence breaks (line 103 and 104), US stocks are vulnerable!
If JNK fails to close above the daily reversal gaps (33.64-33.70 being the most important), stocks could stumble again to test lower bearish reversals. I would not marginalize this interpretation. Junk bond intermarket flows are very good at defining risk on/off flows. Stocks generally fall when it's risk off. That is, unless stocks become a safe haven during a confidence break. For that to happen, bonds must be rejected as a safe haven, a likely outcome in the next crisis.
BuST & BrST > 0, observations made in the daily, weekly, or monthly time frames, warn investors where upside or downside alignments are pushing against the cycle of time. The computer defines these alignments as Early, Mid, or Late. Late cycle alignments are vulnerable to reversal. A daily BuST or BrST > 2, for example, suggests a growing probability of consolidation ahead even in Early and Mid cycle alignments.
Using the Matrix
The value of the Matrix is far more than a study of price. Trends are a function of price, volume (force), volatility, and TIME. The order of their importance is as follows: (1) TIME, (2) volatility, (3) volume & price alignment. Volume and price alignment, a setup that triggers action, favors Grade A & B, early cycle markets under high compression (↓COM). ↓COM suggests extremely low volatility, a quiet trend ready to explode into high compression (↑EXP). Weekly and monthly breakout signals are not finalized until the end of the week and month, respectively. Signals generated before that could be temporary. Keep this in mind when reading alignment.
Suggested Reading: The Cycle of Accumulation and Distribution (CAD), Leverage Oscillator (LTLO), Diffusion Index (DI), Volatility Bandwidth (BW), Compression (COM), Expansion (EXP), Alignment, Upside Alignment, Downside Alignment, Sentiment Model, Intermarket Trends, VIX Model, Economic Activity Composite, Long Term Cycles.
Subscribers are encouraged to submit comments or questions about the Matrix/Insights.
Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.