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The Fed's latest capitulation on rate hikes in 2019 sent gold, the majors, and juniors (gold shares) into alignment. The gold shares, a group close to alignment before the announcement, remain highly compressed (↓COM), so the alignments could be explosive. Subscribers should be watching the precious metals composite (PMC) and confidence oscillator for confirmation. The PMC, close bull phase at the start of the week, won't be finalized until Friday. Confidence remains bullish, but the cycle of time and deterioration in the trend tell us to be ready for transition in 2019. DO NOT be surprised if gold and the gold shares anticipate that transition. The invisible hand is extremely efficient at anticipating events.
Watch the talking heads successfully convert many of the dollar bulls into bears in the coming days/weeks. Bearish headlines, while moron in terms of trading discipline and the message of the market seem logical, they neglect to recognize that nothing has changed global capital flows. The Fed, a follower like us, is only as good as their dot plot model. The dot plot model will be long forgotten as a joke as capital flows dictate policy. Unexpected strength in the US dollar will encourage the Fed to cut rates in a vain attempt to deflect capital from the United States.
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.