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New alignments: Cocoa, Japan, Retail
The discussion that the Fed is more likely to hike than cut rates is interesting as the Economic Activity Composite (EAC) hints towards reversing the intermediate- and long-term trends in May. I can only assume that hawkish Fed discussion is based on Friday's 'bullish' labor report. The computer tracks labor, but not the headline nonfarm payroll number promoted by mainstream media. The headline number(s) are too unreliable - routinely revised and adjusted long after their release. The practice of position a number as "unbelievably" bullish, then revised it months and especially years later is common practice and the reason why the computer rejects it for use in the EAC.
The United States is basically holding up the global economy, yet the EAC preliminary May numbers suggests its deteriorating again. Subscribers should be watching the EAC closely, as it will reveal if the majority is standing on the wrong side of the trade. A bullish majority as the economy weakness will smash certain assets and confidence. This will affect trends in the US dollar, gold, and US stocks - all safe haven plays during a public sector crisis.
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.