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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.
December 22, 2018: During the shutdown of the federal government, the Commitments of Traders report will not be published.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 volatility in US stocks has both the bears and bulls talking. The Matrix supports the bears, but it's possible that after a retest of the lows, stocks bottom. If DI spiked in the Dow, S&P, Nas100, and Russell, it would be obvious the invisible hand was accumulating the decline. This would be bullish and support a bottoming process. The bears, on the other hand, recognize downside alignment in the primary trend for Dow, S&P 500, and many more. While stocks have rallied from the lows in attempt to relieve stretched daily downside alignments, it's probable the lows will be retested and even broken. The Dividend Yield Cycle Review visualizes the bottoming process for us. Will this current decline be a C1, C2, or higher bottom? Lot's of things have to go right to keep it a C1 bottom. The bears recognize this.
Subscribers should be focusing on Palladium and the eventual retest of the US stock lows. Most other 'plays' are old - mid to late cycle, or need to violate important reversals to accelerate their moves.
Traders/investor must exercise patience when selecting buying and selling opportunities in the Matrix. Few real opps exist today. Flag early life cycle trades by using DI, which won't be easy due to the government shutdown. Early life cycle trades, extremely small positions, are escalated in terms of size and risk once alignment materializes and confirms direction. Alignment is the most consistent driver of timing and direction in the Matrix. Traders use DI and return and time profiles (BuS, BrS, BuST, and BrST) for trade management. Computer generates impulse statistics for us. Trades generally last 3-4 weeks, some nearly two months. Losses are generated very early.
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.