Friday, February 8, 2019

Matrix Updated #Stocks #Bonds #Commodities #Bitcoin BEWARE OF STRATEGIST HEDGING THEIR BETS

The Matrix
The PREV (the Matrix), an array that displays alignment of price & volume (trends) within the cycle of TIME, intermarket money flows, and the flow of sentiment, helps subscribers recognize buying and selling opportunities for 44 markets. Markets include #stocks, #bonds, #forex, #Bitcoin & #Commodities.

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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)


Subscriber Comments

The Commitments of Traders report is being updated twice a week until it catches up with the current week. This means DI and other leverage calculations, critical tools that help identify early and late life cycle trades, barring another government shutdown, should be up-to-date by March.

The oil exploration and production stocks have entered alignment. A week retest of the breakdown gap would be a low risk entry point.

The airwaves are full of strategists hedging their comments, such as looking for 20% return in 2019, but don't buy right now because there's 3-5% correction coming (CNBC Fastmoney). The coming correction, however, could decline further 3-5% because it did in 2011, 2016, but not in 1995. This type analysis, an indirect way of saying I don't know while citing numerous historical precedents, is not helpful. If your right, you're right, and if you're wrong, your right.

Markets rarely compare well to near-term time periods, because the numerous cycles that define "the trend" are rarely similar. US stocks, currently in consolidation, could rally throughout 2019, but it won't happen because the economy is picking up steam (see line 98 and 99). The EAC favors economic stagnation or deterioration ahead. The key to direction is confidence, not the Fed. If confidence fails, will stocks act as a risk-on or risk-off (safe haven) asset? In other words, will US dollar, gold, and US stock market link up (trend together) as confidence deteriorates? For that to happen, confidence must enter a bear phase (line 103). After that, the Matrix will tell us if assets are "linking up". If they don't, US stocks could enter a long-term consolidation pattern, struggling to breakout until confidence returns. Subscribers, please click on the chart in line 103, and you'll see what I mean. Bear phases (red boxes) in confidence generally coincide with rising gold prices and consolidation in stocks - basically a large trading ranged defined by cyclical bull and bear markets, an observation that causes a lot of hype by little reward. The talking heads, like the one cited from Fastmone, rarely frame US stock within the phase of confidence. A 20% rally or more for US stocks in 2019 is possible, but it requires them to act as risk-off asset (safe haven) when confidence enters a bear phase. Confidence will likely enter a bear phase in 2019 because the cycle of time (BuST = 2.9) says a reversal is coming.

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.

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Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.