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PREV (the Matrix)
As the headlines worry about the trade deal and Fed, they forget (lack understanding) that the invisible hand controls markets. US stocks have been in a broad consolidation pattern or cause building since early 2018. It will stay this way until roughly 27,000 or 23,000 are decisively broken to the upside or downside, respectively. Until then, investors are watching alignment, time, and energy inside consolidation. A strong build up of energy ahead of the high or low would be bullish or bearish.
US stocks are not the only market in the Matrix. Gold and the gold shares are extremely close to bullish inflection point. Subscribers have been watching gold, silver, majors, and juniors oscillate between triple upside alignment and consolidation for weeks. While the oscillation favors traders at the moment, it will likely give way to a move focused trend as 2019 progresses. Focused trends favor investors over short-term traders.
A focused trend in precious metals requires deterioration of confidence. Although confidence remains in an aging bull phase, there's signal that a transition is near. Signs include confidence's extended cycle of time (BuST) and the slow coupling of gold and the US dollar index. This couple is tracked by Gold & US Dollar correlation (ρ). The computer tracks it, subscribers must recognize and understand its message.
Gold and US Dollar correlation
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.