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PREV (the Matrix)
The US stock market, a trend carrying the least amount of passengers as possible, continues climbing the wall of worry. Perma bulls suggest stocks have come too far too fast and an overly optimist backdrop. This interpretation, however, is not supported by the Matrix. A growing number of the major indices have reset their alignments. The Dow Industrials reset on Friday. Others are following today (See Matrix).
As for wild bullish expectations, the Matrix defines sentiment as neutral. WASo = -0.02 (Matrix line 54). Neutral is 0. Thousands to millions of followers on social media follow talking heads. They also follow their interpretation of trends that include opinions and conspiracies. This game is about reading the message of the market, not opinions. Subscribers learn that quickly.
Matrix Line 54
Gold is another market in which its "gurus" talk too much and listen to little to the message of the market. The gold market is approaching a transition from consolidation to mark up in 2019. Be warned, this transition is still underway. Confidence, the key driver of gold, remains bullish. While the confidence cycle is getting extremely old, it could take months before the phase flips to bear. Subscribers need to track confidence and maintain discipline (Matrix Line 103). The perma bulls are always screaming buy. Smart money is sticking their toe in the water already because the cycle of time on the bull phase is so extended BuST ~ 3.
Watch and listen to the message of the market.
Matrix Line 103
The Matrix's output on palladium changes every day. Observation to come: Pd might fall out of alignment (loose its Trip UP designination), Early will change to Mid or Late, the trend will move in and out of EXP or COM, and the time profile of the trend will change. Traders use this information to take profits or add to long-term positions.
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.