The rise in the stock market will eventually force the Federal Reserve to abandon its attempt to appease international central bankers who are still locked into negative interest rates.
This is actually the exact pattern that took place after the first real G4 meeting, as I call it when the US Fed lowered rates in 1927 to try to deflect the capital flows back to help Europe. It is ironic that history is repeating this same way once again…
Kansas City Federal Reserve President Esther George stated today that the Fed may need to “reverse” the three rate cuts implemented in 2019 that brought rates down to 1.5% to 1.75%… “We will need to asses whether the 2019 rate cuts prove to be ‘insurance cuts’ that will need to be reversed if headwinds fade.”
The Fed will once again turn to its domestic policy objectives and stop trying to help Europe which is trapped into its negative rate policy. Even Sweden has abandoned negative rates stating they have failed to provide what they were claimed to have accomplished.
I want to remind you that rising interest rates are bullish, not bearish. When the time comes to let you know when and what to buy and sell, we will provide those signals to our members. As money continues to move out of Europe to the USA we will let you know here.
Bitcoin Holds Support For Wealth Maximizer Traders
Volatility in bitcoin (BTC/USD) has fallen noticeably in the past six weeks as the pair has been range bound around a key price support zone. Low volatility usually leads to higher volatility, and given the price pattern, bitcoin is poised to move soon.
For the past six weeks or so, bitcoin has been consolidating around the bottom line support of a descending trend channel. This follows the completion of a 61.8% Fibonacci retracement of the 2019 rally, as the pair fell through $7,231.40 seven weeks ago before reaching $6,430 and holding. That low completed a 53.6% decline off the 2019 top and remains the most recent trend low.
The top of the range or resistance of the six-week consolidation is at $7,870.10, which is right around the bottom of the 55-week exponential moving average (EMA) orange line, now at $7,805.60. In addition, the long-term uptrend line has so far provided some support around the recent lows as well. Although it may not be done forming, so far this pattern can be looked at as a possible double bottom trend reversal pattern, as of now.
Although it’s not clear what happens next, bitcoin does seem to be getting closer to making a move in one direction or the other.
The first sign of an upside breakout is on an advance above the most recent short-term daily swing high of $7,689 from two weeks ago, with confirmation of strength seen on a decisive move above $7,870.10. Note that the 55-day EMA, seen in the chart below, is also marking resistance of the current consolidation bottom along with a trendline. Also, there is a bullish divergence in the 14-day relative strength index (RSI).
Even with the 53.1% retracement, bitcoin ended 2019 up 94.1%. In an upside breakout scenario, not only is a move up to the top channel line possible, but bitcoin also has a chance to break out of the declining trend channel. The falling channel is part of a potential trend continuation pattern that has formed subsequent to the 2019 top of $13.868.44. That top ended an aggressive 28-week 343.2% advance off the December 2018 bear market low of $3,128.89 and can be considered as the first leg up off a bottom.
On the downside, a decisive drop below $6,430 triggers a continuation of the bearish channel, and given that a break below the long-term uptrend line would therefore occur, selling pressure could accelerate. The next lower key support zone is identified as $5,900 to $5,427, given prior price support levels around $5,900 and the 78.6% Fibonacci retracement at $5,427.15.
Our info coming directly from REPO traders remains unsure to what extent the FED had to pour in money to prevent short-term interest rates from rising. The analysis which is still mostly calling this Quantitative Easing is just laughable.
The economy is doing well in the USA and unemployment is back to the lowest levels since the ’60s. There is absolutely no basis to “stimulate” the economy.
We can see that the Inverted Yield Curve going into the summer was the warning sign that confirmed our forecast we faced a liquidity crisis beginning in September 2019. Like the weather, everything is moving to the extremes in both directions.
The collapse in the yield curve to invert has ABSOLUTELY nothing to do with a pending recession everyone was touting. The inverted yield curve was being driven by a panic to get out of the Euro. The Euro has been destroyed as a reserve currency because other central banks do not want to hold Euros with negative interest rates which they see as a tax on their reserves for the benefit of Europe.
We can see that the REPO Crisis is not about QE, but trying to prevent the short-term rates from rising. It had nothing to do with taxes and what everyone was attributing it to back in September.
The Repo crisis has been an ongoing crisis because the Fed is trying to prevent the inevitable – the rise in interest rates back to normal levels which reflect risk!
Some people have asked to please explain what this has as an impact upon the average person?
What I am describing is that the trend is back to interest rates rising and this is what the Fed is trying so desperately to prevent. This is all about manipulating the interest rates and fighting against the free market.
The experiment with negative interest rates to stimulate the economies of Europe and Japan have completely failed. But the respective central banks are now trapped. They have utterly destroyed their bond markets, and in the process ensuring their own demise. As they try to maintain negative interest rates, the capital flows are working hard to undermine both european and eastern central banks and the Federal Reserve is caught in the crosshairs.
The REPO Crisis is NOT about Quantitative Easing, it is about trying to PREVENT interest rates from rising which will blow-up the world economy.
Here is my point:
We have to be very careful and attentive, all of what you read and hear by the media now it 100% about “self preservation”. Stay close to your charts and signals.
The vast majority of analysts commenting on this have NEVER advised institutions. They are clueless with respect to what is really taking place. In many cases, even the institutional traders are people who have their coffee cups constantly refilled from beads of sweat pouring from their forehead from what is taking place. Even the COT managers are confused.
Here is my point:
We have to be very careful and attentive, all of what you read and hear by the media now it 100% about “self preservation”.
Stay close to your charts and signals as the vast majority will miss the slingshot move up after the coming false crash.
The vast majority of analysts are clueless with respect to what is really taking place. In many cases, even the institutional traders are people who have their coffee cups constantly refilled from beads of sweat pouring from their forehead from what is taking place. Even the COT managers are confused.
Gerald Celente breaks down what he sees as the trends arriving in the 2020 economy.
The InterAnalyst Wealth Preserver Trade Signals have outperformed the market by 1200% since the year 2000. No matter the predictions or prognostications by your favorite host, just remember to follow your Wealth Preserver trading arrows to grow and protect your retirement and investment growth.
The S&P500 did a bullish reversal in February, but the market went below the crash point in early March. At the time, was the monthly a false bullish signal compared to the daily and weekly which were warning crash?
No. Sometimes, monthly reversals can be good for a trend as they consolidate momentum for a short time. However, on a short-term basis, Daily For example, it indicates only one unit of time and can offer a buying opportunity. May exceeded the April high peaking on the 1st so from that short-term perspective, it was correct. However, the Monthly level is where you tend to manage portfolios rather than higher risk trading. In fact, portfolios usually are sure to manage 70+% of their holdings using monthly trend modeling.
So while there was a brief correction into May with the lowest closing and June was an outside the monthly reversal to the upside, you will notice that on the Monthly level the sell occurred in October. The February bullish reversal to the upside closed above the April high! This is also why I have stated many times that a SHIFT IN TREND DOES NOT unfold until you elect a Monthly reversal; in this example February.
Remember that trend can flip back and forth many times on the daily level within a year, and perhaps 2 to 4 times on the weekly level. That does not hold true on the Monthly which can remain in a trend for extended periods of time. This is the reason Investment firms and fund managers primarily follow our Monthly Wealth Preserver model because they cannot flip back and forth for brief 1 to 2 month corrections. Nonetheless, fund managers spot entry points on the daily and weekly reversals. Thus, as shown in the Daily insert a manager holding funds in cash during the months of May, could have entered the market in early June. This could have earned investors approximately a 2% bonus just for a managers patience and watching the chart signals.
I’ll take a bonus any day of the week. How about you?
The year to date chart below makes it clear that the US Shares Markets SPY, DJI, QQQ, and the RUT outperformed Gold and Bitcoin since January 1, 2018.
Click To Enlarge Chart
The Cryptocurrency market remains strongly bearish as does Gold. Both are going to bottom and turn so we will keep our members posted as to when the turn occurs.
In the Dow, we still see next week as a turning point. We need a closing above 25635 to imply new highs, but a closing above 25432 to stabilize. A closing beneath 25052 will signal a resumption of the decline.
Everything is relative so when we look at the Dow through the eyes of world currencies, it is breaking out to the upside. Keep in mind that it is IMPOSSIBLE to get a major collapse in the US markets when there is a crisis in the world economy that results in a flight to the dollar. All the “Financial Gurus” that have been coming out forecasting the collapse of the US Stock Market are looking only at domestic political issues and rising interest rates. They do not track the global economic picture like socialisms collapse in South America and Europe. This makes all the difference because capital flows are coming to the USA at this time.
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