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Intraday Projection: Deferring to the Larger Picture

Be warned today can be a tough one for the bears during the day session. One needs to prepare for that. Today is a more or less modal situation around the open. If we reverse any strength into the open - probabilities prefer down into 1:00 PM (with possible acceleration at 2:30 PM) or the reverse. Keep in mind that a move today could become persistent.

On the bigger picture front, Daily Market Structure Projection, as posted last week, indicated a turn Tuesday AM from an upwards directional movement to downwards movement. This has occurred. Today probabilities were also for a lower AM session than yesterday AM. This has occurred, and the condition is met. The largest potential downside momentum in terms of points is suggested with a down AM session into Thursday AM. This can be pronounced and test the 2065 to 2044 area if it wishes. Be aware that we are likely entering another central bank bubble blowing contest and may take an intervention attempt and classically like all central bank activity - will be over done. So, move into early September from a potential central bank panic this week may be torture for shorts and, ironically a windfall for a only a few days for longs who will likely have similar frustration in reaction to it. Strong drop after first weeks of September.

August 19th, 2015 Intraday Market Structure Projections

August 19th, 2015 Intraday Market Structure Projections

Daily & Weekly Projections – Approaching a Bounce Point

If you are a regular reader then, no doubt you are aware that last week several times it was mentioned that strength was expected into Monday AM with two days of weakness which we felt would help clear up the near-term picture. That it certainly did. We remain on target for a wide range chop into early September - so within 140 points range that the S&P500 has been in. Be aware that a large ramp appears to have the potential occurring from the bottom of this range as central bank malfeasance reaches even more epic and delusionary proportions. Best approximation is that weekly MSP (Thick Magenta) shows mild downward pressure into next week...so, most likely this will be key to watch. Is is quite reasonable at this time to expect a real test of the 2044 SPX cash price supports. - if so, into next week seems likely.

August 12th, 2015 Daily & Weekly Market Structure Projections

August 12th, 2015 Daily & Weekly Market Structure Projections

A Look at the Bigger Picture

The grind up last week and early this week was horribly executed and very low-quality participation and a clear price anomaly. In such a situation, when the markets go off course, as happened in November last year to similar central bank brinksmanship, the daily (White) and even the weekly (Magenta) MSP may show divergence to market patterns. The concept behind all of our tools is to represent market facts/directional probabilities, so when MSP diverges from actual market activity in a significant way that is as good information as when the market follows its structural metronome.

We still need to fulfill the potential of the weekly directional projections which go forward into mid-August and that pressure has now reached a very high impact potential for the markets. Below is a general idea of what MSP is seeing. Keep in mind that the basis for daily MSP is NOT cash session close to cash session close - it is morning session to morning session based. Additionally, as with all MSP, the size of a move in points should never be assumed - the utility here is only helpful in understanding the market metronome

July 23rd, 2015 Daily & Weekly Market Structure Projections

July 23rd, 2015 Daily & Weekly Market Structure Projections

Short-Term Projections – Look Out Below

Yesterday was an exceptional day. Good and bad. Sloppy market structure caused by constant emergency central bank interventions all over the world have made the markets a bit more unpredictable than usual. However, Timing, eTick-Tools and MSP  all worked very well and the Gold projection was tracked very well into 2:30 PM timing drop and bounce into the close. In addition to getting Sell extremes at the lows -  before the close we alerted in the lounge that the overnight session favored an upward bias that could be significant. Certainly at this time it was not obvious that strength would be to new highs. This is important to understand, market structure is designed to project timing and directionality NOT scale of price movements. It is easy to want to ascribe relative size movements to an MSP chart - however, it is important not to do this.

For example, the weekly MSP projects down for the next 4 weeks or so. Looking at the chart (posted previously - not shown in this post), it would be easy to ascribe a 120-point drop for the ES from it. However, the implications are directional - a drop could be 40, 60, 120, 240 points or anywhere in between.

Today's strong overnight activity could well lead into another short capitulation which would be indicated on the Red projection below. The Gold market structure projection (MSP), is equally probable at this point. Probabilities, however, are not positive for the outcome of this action and favor a pronounced downward bias into 2:00 PM with likely acceleration into he close thereafter.

July 16th, 2015 Intraday Market Structure Projections

July 16th, 2015 Intraday Market Structure Projections

Projections Today – Sloppy Market Structure = Less Clear Edges

The market structure has been conflicted and sloppy, decreasing the relevance of probabilities on a short-term basis. This something that typically happens when the markets are moving without much foundation or confidence. Short-term market structures become less clear, and tracking becomes sloppier as chaos reigns. In the current situation, central banks are all over the place not quite sure what to pay attention to next. Market structure is driven historically most prominently by central banks and large institutions. While the mcm Index charts posted on the weekend show us pretty well what the institutions are thinking. The central bank contingent is going from one fire to the next - which serves to make things a bit more sloppy.

KEEP IN MIND THAT MOST MARKET STRUCTURE PROJECTIONS ARE AT POTENTIAL INFLECTION POINTS THAT SUPPORT PROBABILITIES FOR PRONOUNCES WEAKNESS FOR THE SHORT, MEDIUM AND LONGER-TERM.

The way it stands currently. Preference is for a UPWARD move (wave) into 9:00 AM or around the pre-cash open being reversed and trend down for the remainder of the day. Or, slightly lower probability, a DOWNWARD move into the 9:00 AM area or around the pre-cash open being arrested and bounce into the 2:30 PM timing. Therefore, the clearest potential edge is Opening high favors intraday weakness or the reverse.

There is one emerging potential that we are monitoring closely is the Gold projection. This is the most negative biased of them today. For this reason, it is reasonable to pay attention to the minor 10:30 AM timing at [2] and be aware that an up move that is reversed between 8:30 AM and 10:30 AM timing imply increased downward risks for the rest fo the session.

Error: Timing was represented as 1:30 PM when this post was initially posted. That is INCORRECT. Afternoon timing window is 2:30 PM and this has been fixed.

July 14th, 2015 Intraday Market Structure Projections

July 15th, 2015 Intraday Market Structure Projections

Preview of Tomorrow – Projections Update

Today daily market structure projection probabilities favored a down move for the AM session versus yesterday's AM session. This flat out did not occur. Not only that the more probable intraday market structure projection favored market holding up into 9:00 AM (Magenta or Red projections below with circle (1)). We posted to be alert for the potential for a 9:00 AM low as it would switch the shorter term bias for a ramp ingot 11:30 AM to 12:00 PM timing - through the day still favored weakness into the close. That was correct and tracked, however, the shorts are in so much pain yet again for no particular good reason, that they got stuck and clearly were overwhelmed. (Wonder which central bank was doing the squeezing). Interestingly, as marked today was a high probability for a projection for a July Monthly High - this was achieved at the close. Sometimes, all the best data can be overwhelmed by overwhelming market stress - like today against the shorts.

Our approach to analysis let us know early when things were shifting today around the 9:00 to 9:30 AM lows and also that "edge" was compromised. Was easy to get out fo the way and most importantly have a good idea of was likely if the edges did not play out.

Looking ahead into tomorrow, most optimistic case implies 8:30 AM highs with 1:30 AM lows overnight and a down day session. Daily MSP is bonafide down and continues down for another four weeks straight. Again, a 9:00 AM low is a warning sign for bears, as many will likely get trapped, and implications are for another test on the upside - this is NOT the favored probability at this time - but something to be aware of. It is a good probability the things could get rather unpretty during this time

Downward acceleration can occur tomorrow. That potential increases and can produce a strong downside day if 5:00 AM highs remain the high limit of the AM session. Another marker to watch for.

July 14th, 2015 Intraday Market Structure Projections

July 14th, 2015 Intraday Market Structure Projections

Strong Overnight with Gap Up Probable as expected – Intraday Projections on Track

Yesterday, we posted the daily and weekly MSP, which indicated a down AM session yesterday from Friday's AM. This was met. Today's AM was indicated with UP probability. Further into the week, downside bias is probable into Friday AM. If downside materializes into Friday, as probabilities favor, it could become pronounced.

In the e-Tick-Tools Lounge yesterday afternoon, we were very clear that given the overnight market structure, probabilities favored a strong overnight and likely gap up with what, in likelihood, would likely result in AM high near the cash open - as most probability scenarios are supporting weakness from the 9 to 10 AM area possibly all the way into the close.

Keep in mind this is a Central Banker game time and they are sparing no tricks in their attempts to levitate markets. Market structure timing is forward till the 12th to 14th for a potential turn and any accompanying bounces or rallies into those highs are likely to be event driven or direct Central Bank interventions.

July 7nd, 2015 Intraday Market Structure Projections

July 7th, 2015 Intraday Market Structure Projections

Market Showing Dramatic Divergence Between Price, Actions & Emotions

Why should we expect the markets to make sense. They clearly rarely do. But that is what both makes them predictable and perplexing. The chart below is showing the mcm Accumulation indexes. Accumulation Index has been unusually strong (top cyan line) while prices have dropped 20 ES points. Additionally only $2.9 billion has been cashed out of US equities which is comparatively little considering the drop. Normally this number should be something like $12 to 15 billion by now. Not only that Trade tickets executing on the Ask or above are 45% greater than trade tickets executing on the bid or below. While the market is down 20 points!!!

Can someone please tell me the name of the central bank panic-buying?

July 2nd, 2015 Intraday Accumulation Index Components Update

July 2nd, 2015 Intraday Accumulation Index Components Update

Reminds me of IMAGINARY NUMBERS!

EURO Broken, Breaking and Broke – Greece Plays Its Hand

EURO Broken, Breaking and  Broke

EURO Broken, Breaking, and Broke

The ECB thought they could back the Greek Government and leadership into a corner with no other choice than an insipid self-destruction that would have left them, culpable, maligned and threatened by their own nation. Soon to be replaced by a trinket government installed at the whim of a few EURO bureaucrats (or Neo-Nazis - take your pick).

Greece played it about as well as possible. Knowing that the objective of ECB and Germany was to make sure that no other political administration in the crumbling European Union would ever be willing to commit such an act of defiance and humiliation against central planners. They waited till after markets had closed to announce a referendum and to "stick the finger" to the central planners (see ECB & EU Strategy – Political, Not Practical). During the afternoon on Friday, Greece made overtures but just after the close of the markets they gave no wriggle room to a central bank that thought it owned the outcome of the situation.

This era, characterized by the senseless debt pumping by central planning bureaucrats all over the world, has destroyed many lives and is presently in the process of destroying millions more - which will inevitably be the driving force of more complex conflicts between nations. The fact is that, via side deals and convoluted transactions with the US FED, virtually all sovereign central banks operate US FED policy by proxy. Almost all of them are precariously close to losing control of the leverage they have been so desperate to pretend is a catalyst to growth when in fact it is clearly the opposite (see these charts). IMF and BIS have been projecting wild fantasies regarding Greek growth for years. As it appears, these delusions are influenced by blind deference to the concept that something can be created out of nothing by a few bankers with a "control-P" key. Sadly this is not the situation as so clearly shown in IMAGINARY NUMBERS. With so little real capital available and so much leverage, even a little disruption can have grave implications. The next months and weeks will likely reveal more regarding leverage (more accurately deleveraging) implications.

Leverage - Where are we now?

Leverage - Where are we now?

These crises arising all over the world may be a catharsis for people in the end, but it will be one of the most painful paths possible for rejuvenation. From this perspective, Greece knows they are in pain, it can not get much more intense for them. What you can not pay for does not get paid - so, there is somewhat of a limit. BUT IT CAN GET VERY PAINFUL for debt-pushing central-planners. The implications of huge and contagious CDS & derivatives losses, financial instability and challenges that are all pointed at the feet and minds of central planners (as opposed to indebted governments) is likely to be a trend.

If there is one lesson from Greece, it is while the drug is offered - take it. When the drug causes ill health and death, for the history books, make sure its manufacturers and pushers get the blame. 

ECB & EU Strategy – Political Not Practical

EURO Implosion

ECB and EU Strategy Political Not Practical

ECB and EU along with many politically interventionist central bank efforts have created a drawn out, conflicted and confusing environment. On one hand financing is readily available for an utterly defaulted nation that never quite made it into the EURO (Ukraine) - yet Greece is being an especially tortured soul. How can this ECB's/EU's conflicted strategy be explained?

It is clear that every day lately, a barrage of the most ominous and negative press grabbing sound bytes are projected by IMF, ECB, EU, etc. Occasionally with rhetoric from Greece and the obligatory 1 out of 10 positive test bubbles. What are the goals of this kind of unending, torturous behavior? Certainly, concern for Greek citizens can not be being improved with this gamesmanship. What kind of negotiation is this?

A POLITICAL BATTLE IN A LEVERAGE WAR

The reality of conditions is that ECB and most central banks have pushed the envelope to the extreme. They are in danger of losing control. It is likely that they have already lost control based on the impacts of their grossly irresponsible gambling and policy activity. A Greek exit for ECB is NOT an option. Yet hyperbole from Eurocrats seeks to project that it's just another day of doing business - nothing to worry about here. However, nothing could be further from the truth. The real fear that ECB and EU has is the potential that it appear qualitatively viable for any nation to pursue a similar negotiation as Greece. Behind the veneer, who knows what kind of deals ECB/EU is making or may need to be made. However, publicly ECB/EU and central banks need to project an image of balance and control.

They have a lot of power and do have the potential for a lot of control. This was on full display in the UK recently when just about any EU dissenter was served a knockout blow in the election process. Scarcely ONE of them got reelected. How convenient for the ECB and EU just as the UK was gaining momentum in its independence movement. If there ever were a clearer message to a politician - it could not be much louder than the one sent to the UK by ECB and EU with their successful and dramatic meddling in the UK political process.

Greece is a vastly different story,. What they have in common though is "leverage": both in the UK and Greece leverage is much too high, and both can not possibly pay their debts. So, what is all this grandstanding for between ECB/EU and Greece? Political intervention. With the central banks losing control of the debt situation and more importantly the ever growing public awareness of what interminable debt servitude looks like, the EU and ECB should an "A" for demonstrating a new and innovative forms of control, manipulation and subterfuge.

The root of the problem at this time is the large amount of insolvency in the system. It is no question, that every politician in Europe and even some in the US are watching with great interest for when they can clamor onto the stage and beg for their own refinancing, bailout or funding.

The labored, conflicted, and irrational hyperbole from ECB and EU makes sense in that it is conveying a very clear message. "When negotiations are complete in Greece, there will be career ending, political and physical risks for politicians." If there is one area that any politician wishes NOT to occur, its reelection, financial, legal, impeachment or physical risk to themselves. Additionally, politicians generally would like fruits for their labor to be rewarded and spendable - both real and political capital.

Danger, potentially criminal or life-threatening, from constituents, is not fodder for a long political career, reelection or spending of real and political credits. So, what we are seeing here are the desperate attempts of the ECB and EU to both agree to anything required to get the Greek situation to disappear behind the curtain. While ending the political careers (not to mention other significant risks) of anyone stupid enough to cause trouble for their debt expansion agenda and marketing campaign.

From this vantage point, this strategy is showing some progress and is quite imaginative. The key to a signal of an end to Greek negotiations is the implosion of political careers of the "deviant operatives" in power and at the negotiating table in Greece currently. One could not send a better message than the ECB and EU events in UK and Greece can be conveying to Italy, France, Hungary,  Spain, Slovakia, Romania, Slovenia, Latvia, Ireland, Czech Republic, Estonia, Belgium, Croatia, Austria or Bulgaria politicians. While there is not even a shred of practical or sensible in this process - political it clearly is.

Will this kind of tactic be able to supersede or merely suppress temporarily the dramatic consequences of a destructive credit expansion while these eurocrats and central bankers search for the ever elusive "PLAN B"?