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Friday, August 26, 2022

Market Update 8/26/22 - Weekly Wrap-up ahead of Jackson Hole

 Yesterday's rally, led by a little short squeeze coming out of China. This is typical of bear markets; whenever the central bank proposes more stimulus, you'll see retail short sellers run for cover. Seems like we saw this every few weeks, in 07-08

This is a good excuse to update China 

$PGJ China Golden Dragon - jacked (rigged) above the 50 day ma., in order to trigger buy programs. 

 

Barron's reports 

Alibaba, JD.com, and Other Asian Stocks Jump. This Time, Thank China’s Government.

Look at the previous 6 short squeezes on the above chart, and you decide if you think you want to hang your hat on this one! 

Of course I'll be looking to get short, China, and the rest of World

Speaking of the rest of World: Does anyone believe that the US will not fall into the next Great Depression, when every other market collapses? I think the only bright spot in that scenario, might be that the US banks could avoid going belly-up, if they're shorting every other market. 

Jackson Hole  

The lame stream media would have us believe that Chairman Powell is going to say something more dire than he did, a month ago, and if there was ever a good example of worthless news hype, this is it! 

CNBC is claiming Powell will not give markets what they want. That would be a real pivot...!

To refresh your memory: Back in June Powell said "the fed could raise the bank's borrowing rate by .75 point, and in July, they did exactly that. Today, we are to believe that the Fed is going to come out hawkish, and talk about 1%, or higher, rate hikes in the future?  

The fed minutes made it clear that the fed plans to continue to hike rates, until "inflation eases, substantially". 

In reality: The Fed will do whatever they have to do to defend the holy dollar, and not upset the market, ahead of the Nov. elections. 

Doesn't look to me, like the market is pricing in inflation, as the $USD continues to scream to the upside, against the $YEN, and Gold plummets. 

What inflation? 

Here's my deflationary prediction for the dollar (see the grey dotted line), back in 2018, and here's the $USD breaking out to new multi-year highs. 


A strong dollar is deflationary, not inflationary. 

Folks will argue that gasoline futures are high, or Natural Gas, and then point to diesel... but the fed doesn't control energy prices, or even factor it in. It's just amazing to see so much information, now-a-days. 

$GASO Gasoline prices crash. Lame stream media continues to report high gas prices 


What about Silver? 

Silver breaks long term support, as you would expect during a deflationary spiral 


So, what to make of all this? 

1. It's possible that the Fed wants to cause a Great Depression, by making is more expensive for banks to borrow money. Why, because they can unwind their balance sheet, while the board members, and their friends and family, and fed member banks, short the market at the same time. Not to mention insider trading in congress.... 

In case you missed the story, the fed only recently claims they are no longer trading 

Federal Reserve Tightens Rules on Trading by Officials investopedia 

2. It's possible they (the fed) have no clue as to what's really going on. This was exactly the case back in 07-08. 

Either way, I'm not sitting on the edge of my seat, like most investors, every time the fed speaks. 

The Trade: 

I think if the $SPX can rally back above the 4200 level, then it can certainly even retest the recent highs, or at least fill the gap, that was left behind on Monday. 

I basically already said as much on Twitter, on Wed. 


Just like the Gap fill we're seeing in shares of NVIDEA 


This is the last weekend of the summer, so why not squeeze the short sellers at least one more time? 

 And next week is a truncated week, and a window dressing month, and if you know what that means, then you know what to expect. 

Natural Gas: 

See the past 2 market updates, for a closer look at the energy trade. 

There's no doubt in my mind, that the crooked banks are planning to take energy down, in order to help the leftists, in power, but the election is still a couple months away. 

Reviewing a forecast I found on FXEmpire and Tweeted out yesterday: 


The author of that piece it smart, in that he doesn't attempt to know what is about to happen in NatGas, rather he lines up the support levels, and possible targets. 

As I explained in my tweet yesterday, he claims he doesn't know what the next target would be on a breakout? The obvious target on a breakout, is the top of that same pattern, or a throw-over, over the top of that megaphone pattern. I've pointed to that pattern in previous updates, so you can chart that target for yourself... 

The only other target I see on Natural Gas is the top of a channel, @ 11.25. 

$NATGAS DCS chart 

 


But what if.... and it's the "what if's", which will come back to bit you in the ass... 

What IF it's a wave "b" as I've been pointing to all week. Go back and study the recent updates, and if you haven't already done so, familiarize yourself with Elliott Wave Theory, and pattern trading! 

 I think it's becoming pretty obvious that every time the market crashes, the so called smart money is going to continue to hide in Energy, but that trade seems overdone in the short term. 

Still, I'm anticipating a breakout, and short capitulation, ahead of the crash 

$UNG (nat gas fund) - looking for a breakout... 2. That breakout point will become st support. 3. Resistance around the 34 level, is going to look like a head and shoulders pattern. 


Then we'll see where we are next week. 

Remember Natural Gas contracts expire today! 

Take Care, and have a great weekend! 

AA  



 





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