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COMMENTS ON FINANCIAL CULTURE: Global Liquidity has abdicated its throne. It has worn out its welcome. Inflation and such is twisting the fates of Central Bankers. Financial History is moving on, as it always does. Now, to reiterate my view: “What if this is the beginning of a Hyper Inflation spike! Pandemic Denial about Everything Bearish is still operative. Uncertainty never reveals itself until after it is obvious. It never pays to blithely Believe in what you are constantly being told by talking heads. Bigger moves yet to come.
The Market Scape: Complacency never seems as bizarre as when it is viewed in hindsight. Rate Rises were and still are only a matter of time until they matter. “Covid,” may keep morphing into more deniable uncertainties? What are we all missing? Can Inflation get Hyper? Yes, it can. Can markets crack. Yes.
EQUITY STRATEGY: The timing pattern has always suggested an important pullback later this year. Here we are and the next interim low is due into February and March in 2022. The Liquidity ‘miracle’ is ending. Markets do change.
EQUITY TACTICS: Stocks are tactically messy. Seasonal bounces possible. GLOBAL EQUITIES: Congestive correction continued bias into early 2022.
FIXED INCOME: An expected secular “Bull Trap” has been unfolding
FOREX: Dollar is churning in a range and will likely to remain there.
COMMODITIES: Commodities “Knew” Inflation was coming.
Crypto still has ‘Whoosh Risk,’ to the upside.
CRUDE: Mid-June low was Key. Still well Bid. Panic Possible?
GRAINS: Are structurally bullish. Weather volatility
EQUITY SENTIMENT: An extended Complacency continued until it just had to end. The sentiment divergences were ominous which warned of an eventual comeuppance. This situation remains cautionary. The inference is: It will take more time for Reality to be
S&P Daily: It is obvious that the stock market has changed. This is more than a minor correction. This is of a larger degree. It is at least of an interim degree. But a typical seasonal topping process may yet unfold. So, rally attempts may set up for recoveries into Thanksgiving.
TACTICAL SENTIMENT: The DORSEY Market Sentiment continued to generate very high bullish readings until it couldn’t bear it anymore. Strange toxic complacency gave way to Reality. The quality of the declines is compelling. Cogent negative memes are now revealed.
DAILY EQUITY PROFILE: The Russell (IWM) continues to define a quizzical range. This extended rectangular range consolidation will eventually be resolved by a breakout. Yes, it could still weirdly tease on the upside but the interim pattern into early 2002 will overcome that.
GLOBAL EQUITY STRATEGY: German Equities have executed a well-defined rounding topping process. The Dax has only been congesting over the last few months. It is near key support but that doesn’t mean it has to bounce hard. More Fall congestion.
Volatility: (VIX) Profile: VIX had been simmering and whimpering for some time while holding extended structural Support. Uncertainty can never be perpetually out of season. Everything Changes? Yes
FIXED INCOME STRATEGY: Repeat: “Rates R Rising for Decades.” Obscene Liquidity is being revealed as structurally nefarious. An initial interim rate high is due in 2024. Central Bankers have kept playing the only game they thought think that they knew now to play. Rates are headed for 3%-3.25%. Inflation is very far from transitory.
FIXED INCOME TACTICS: Treasuries will be continuing lower for much longer than most believe. Yes. Talking Heads may keep you in Denial, but the larger pattern remains clear. Rising Rates are only modestly recognized by the Taper Talkers. Ominous. Good Luck, Jerome
CRUDE OIL STRATEGY: Crude had a great but quick shake out. I had allowed last month: “It will zoom right back to the highs. Commodities are structurally open to higher prices. This could turn out to be an Inflation like no other. It might happen.” Indeed, there is no denying this asset class. This bid in Crude is a tell for all of Stuff.
CRYPTO: Bitcoin Weekly: Bitcoin had a wonderful setback within the interim rally from Mid-July. There is ‘Whoosh Risk’ in this asset class. Price profiles allowed for strength towards Thanksgiving B4 a major shake down B4 another rally. It will become bid again in Q1 of 2022.
Precious Profiles: Profiles allowed for some setbacks within a structural reflation phase but were due to reverse higher. But Silver and the others are mostly deeply underwhelming. Reflation is recycling which may end up tipping price gains into something Hyper. Silver is at amazing weekly support.
FOREX DIAGNOSIS: The Dollar continues to bounce hard but remains up against Key Weekly resistance. It still looks like the top side of ranges may prevail. That is preferred so allow Range to continue.
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