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New alignments: Cotton
Markets from the US dollar to stock continue to post impressive moves as growing number of investors (invisible hand) recognize the global economy is in trouble and central banks are completely trapped in terms of policy. These points are often missed by those listening to the greatest US economy (economic growth) in the history rhetoric. Selling a narrative to win votes is easier than understanding the forces that drive trends. Central banks have destroyed bond market around the world insomuch that they can't tolerate free market. A world of zero interest rate policy or less has created a no private sector bid market. Politicians and policy makers depend on Keynesian economic principles to interpret economic outcomes, but today's backdrop has invalidated them. Trouble is coming, they'll respond following principles no longer valid. The panic comes when the world realizes there's no one other than the invisible hand behind the wheel. Outcomes will be harsh and unpleasant.
How is the US economy doing? The Economic Activity Composite shows a slight uptick within a broader decline. What happens when the uptick reverses, again? The greatest economy in history faces a major loss of confidence and turmoil from an unsuspecting public. The only way to be prepared is follow the unbiased trends described in the Matrix.
Economic Activity Composite (EAC)
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.