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PREV (the Matrix)
New alignments: None
While there's no new alignments in the Matrix, the computer is showing us some interest developments in many markets - most notable gold, silver, and natural gas. Let's focus on natural gas; I will provide a review on gold and silver later this weekend.
Natural Gas's Matrix output:
At first glance, this alignment (Triple Down, Grade A Primary Trend Breakout) looks undeniably bearish. The odds are nearly 100% that the bears control the chat rooms and social media threads. The bears, however, a looking only at price. Mistake. The computer, a follow of leverage (futures & options distribution), shows us that the invisible hand is accumulating. Accumulation is now statistically significant as DI > 60%. Adding to the growing bullishness is a big decline in participation, a quiet market defined by WA ~ 20% (see NG DI). Accumulation within a "quiet" market favors the bulls, while the majority talks of lower lows. Experienced users of Matrix know that accumulation can continues for weeks or months, pushing DI and DI2 higher before the trend reverses. DI2 is still relatively low, suggesting early stage accumulation. The key observation here is that the invisible hand is accumulating for a future outcome, whether it be weather, supply/demand dynamics, or some other bullish event. Subscribers should begin the process of unwinding their bearish positions, thus, starting the process of transferring control of the trend from weak to strong hands. Continuation of these trends builds more and more energy until the vocal die hard bears are trapped. This is not a predication, as I must watch and react to these trends (invisible hand) just like you.
Natural Gas DI
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.