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PREV (the Matrix)
There's way more going on that US China trade negotiations, but you'd never know it from the headlines. Markets are jumping wildly and the media explains the volatility as a byproduct of trade uncertainty. Yet, business and banks are faltering all across Europe and the Euro continue to probe its recent lows - all because the Art of the Deal is not progressing as expected? Hardly.
Existing trade with China as been a source of stabilization not only for the global economy but also diplomatic relationship between the two nations. The countries need/use each other to promote their own social and political agendas. The rise of nationalism, a blind narrative that ignores interdependence of nations, has removed the old system of checks and balances for the benefit of votes or clicks on social media? Destruction of the current relationship only accelerates the transition of power from the US to China. There's nothing we can do to stop it other than prepare for a different global role while capital migrates from one power base to the next. This migration takes place every couple of centuries. It's just time.
All attempt to impede or reverse this migration will fail. Slapping on tariffs will not solve the problem or incentive China to negotiate beyond offering more money to the US. If today's confrontation posture escalates further, the offer of money (increased trade) will be off the table, thus, leaving the world vulnerable in the next economic downturn. Recessions are normal. Depression, byproducts of policy mistakes, are not.
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.