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Subscription service has been restarted. Free access to the Evaluation Matrix has not changed. The Evaluation Matrix will be updated periodically.
PREV (the Matrix)
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.
The Commitments of Traders report will likely resume publication in the coming weeks, but hey, it's the government, so there's no guarantees. Return of the diffusion index will be welcome event. It's an absolutely critical tools that helps identify early and late life cycle trades. Trading without DI is similar to planning battle strategy without scouts, drones, and/or spy satellites.
Early cycle alignments include the 10-year and gold. Gold is an important setup that will garner increasing attention in 2019. In terms of establishing a trade, gold needs a daily reset, but the primary trend driven alignment is highly significant. Many gold bulls will see the change of trend as a sign of future inflation driven by years of QE, but we know better. Gold is a game (trend) of confidence; confidence, defined by CE LTCO, is still bullish but deteriorating rapidly. Fingers will point at politics, but the problem is deeper than that. Politics are a symptom. A bearish trend supports gold and headline news that can only be characterized as "shit hitting the fan" type of stuff. Make America, Britain, Europe, Australia, Brazil, China great again slogans, statements of rising Nationalism within a highly interconnected global economy, will become an embarrassment for those that know how to read the markets.
I will be tweaking many of the Matrix components this week. The banks know what's coming, so they're adding call features to many of their structured products (ETF). The public will be left holding the bag, while subscribers will be reducing risks by talking profits according to the return and time profiles from the Matrix.
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.