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Comments on Financial Culture: Long live Inflation! Or Hyperinflation? Central Bankers are busy right now trying to figure out what they don’t know. Uncertainty is only revealed when it is. Here it is. Markets are telling us something. Don’t Believe what you are being told by any Talking Heads. They only talk about what they wish they knew. Expect a very volatile year. It may get more interesting.
Meta Market Semiotics: Inflation & Rates are Rising. Equities don’t understand the degree of the correction that they are in. Volatility! The
Market Scape: As April rally may be a refreshing hiatus.
EQUITY STRATEGY: The profile suggested Weakness. We have had that. The ‘Lapdance of Liquidity’ is well over but it segued into a ‘Transitory’ Inflation. That may transition into a Hyperinflation. Q2 reprieve but not Q3 & Q4.
EQUITY TACTICS: Stocks still corrective but want to carve out a bottom.
GLOBAL EQUITIES: Correction continuing but near a nadir? April rally.
FIXED INCOME: Expected secular “Bull Trap” will continue for some time.
FOREX: Dollar remains in an expected breakout. It still has a bid bias.
COMMODITIES: Markets “Knew” Inflation was coming &, “It isn’t done.” As expected last month: Crypto: “Stagnating.” CRUDE: “Energy still bullish.”
TACTICAL SENTIMENT: The DORSEY Market Sentiment generated high bullish sentiment. That strange toxic complacency resolved into an expected harsh decline which, after some bounces, resumed an important interim correction. Yes, a low is likely looming but not yet.
DAILY EQUITY PROFILE: The IWM continues to demonstrate classic tactical behavior. Recent bounces from the lows is not a definite indicant of a low but it is suggestive of a looming Spring low. It seems likely that further congestion may occur B4 a decent April rally.
EQUITY SENTIMENT: Bullish Complacency was abandoned during the recent expected correction. Sentiment may be nearing a neutrality. Still, the Inflation meme, is quickly transitioning into Hyperinflation? Thus sentiment is near but not yet signaling any durable extreme.
QQQ Weekly: Expected Inflation was Recognized. The price pattern turned overtly negative, as profiled. Whatever markets do may tell us more than we want to hear. This is already the biggest decline in years. Sure, a recovery may be near but the real tale: It is a Structural Shift.
GLOBAL EQUITY STRATEGY: German Equities have broken down out of their congestion. The interim profile always allowed for more corrective time. Here it is. A low may occur in next 2 weeks. Potential April rally but Q4 looks negative for sure. Not an easy market at all.
Volatility: (VIX) Profile: VIX has gotten exciting but has not made an historic move, yet. Still it has broken out of its extended base. Uncertainty never goes out of style. This may be the year of Volatility
FIXED INCOME STRATEGY: Ho Hum. Rates rising for Decades. Obscene Liquidity was structurally negligent. Next high due near 2024. Central Bankers play the only games they think they know how to play. As advised: “Rates going to 3%-3.25%. 2022 may yet become dynamic later on. Beware. Be prepared. Inflation is trending.” Yep.
FIXED INCOME TACTICS: Treasuries have stayed relatively tactical, but their destiny remains definitely lower. TLT is getting a respite as other assets are in shock and awe. Talking Heads will explain it all to us after it has already happened. Tightening has still only just begun.
Precious Profiles: Reflation was due to segue into a Hyperinflation. Precious Metals had been underwhelming. But Stuff is generically bid. From last month: “Gold has been simmering maybe for some hidden purpose? The bullish structure, infers Gold is preparing for a move up.” Higher into May.
FOREX DIAGNOSIS: The Dollar clearly broke above Key Weekly Resistance. As noted: “The Rising Rates Reality supports a level of bidding persistence. This upside had more to go, as expected. Still more.
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