1/X
(Sept 23, 2022): Models Concur On A NY Low Today In Equities, And Reversal Till Sept 28; But It Looks A Grim Outcome For First Half Of October _ Robert P. Balan
(For public record purposes, primarily)
Full report at Seeking Alpha:
seekingalpha.com
(Sept 23, 2022): Models Concur On A NY Low Today In Equities, And Reversal Till Sept 28; But It Looks A Grim Outcome For First Half Of October _ Robert P. Balan
(For public record purposes, primarily)
Full report at Seeking Alpha:
seekingalpha.com
2/X Summary:
3/X The Mod Corr Coeff model (SPX vs. VIX, VVIX, SKEW Indexes) recalced after NY close Thursday, and confirmed as from today (NY Close) a coming upside reversal at least until Sept 28. Please note that the model tends to frontrun . . .
4/x . . . the actual inflection point by a day even two, and that is true for the target date as well (all in NY close basis).
5/X SOMA models also concur with the Corr Coeff forecast. We may have seen the trough in equities (NY close basis) today, until month end. Looks like grim outcome for the first half of October. But thereafter, models signal strong market uptake due during second half of October.
6/X The Fed Balance Sheet model also agrees with the two models.
Providing a broader measure, the Fed B/S components agree with the outlook of upticks for the rest of the month, a dismal first half of October, then a measure of strong rebound during the second half of October.
Providing a broader measure, the Fed B/S components agree with the outlook of upticks for the rest of the month, a dismal first half of October, then a measure of strong rebound during the second half of October.
7/X I've been asked what to do with gold short hedgers and overhedge. Gold has been resilient given rising 10Yr Yield and falling equities. Gold links to 10Yr yield via the DXY. However, often times, DXY lags behinds it response to the changes in Yield by as long as 24 hours.
8/X So I expect DXY to still rise sharply by Monday (and catch up to the 10Yr Yield surge today) which should negatively impact Gold. The let's see if we get a chance of exit those Gold short hedgers with some profits, during that expected Gold decline today, or by early Monday.
9/X We buyback the short Gold hedgers when the Z2 contract falls to 1655.
all PAM BUYS BACK 900 CONTRACTS GCZ2 WHEN GCZ2 PRICE HITS 1655 (VIA THE MARKET OR ARRANGEMENT WITH THE PRIME BROKER, BEST PRICE), GTC -- ALL FUNDS
all PAM BUYS BACK 900 CONTRACTS GCZ2 WHEN GCZ2 PRICE HITS 1655 (VIA THE MARKET OR ARRANGEMENT WITH THE PRIME BROKER, BEST PRICE), GTC -- ALL FUNDS
10/X Looking for the DXY to have one more consolidation, and then uptick, before coming down more significantly within the next two trading days.
11/X That may provide a wherewithal for GCZ2 Gold to consolidate, then fall further (allowing us to exit the short hedgers), before rising again.
12/X Gold short hedge buy back orders are filled.
13/X That Gold (XAU) spike up suggests higher NY closes early next week.
14/X New higher high for DXY _ spooking Gold. But remember that DXY lags the moves of the 10Yr Yield by circa 24 trading hours, so DXY will rise further. And Gold in turn, lags the DXY inverse move by as long as an hour sometimes.
15/X The DXY should be lower later in a trading day or so __ so gold should rise on that DXY decline Monday.
16/X While the covar between Yield and equitity futures are positive during tha day (and past 4 days as well), the response of equities to the Yield also lags behind, intraday.
17/X This is the Head and Shoulders pattern that I am watching in the 10Yr Yield. Watch out for the retest of the armpit trendline, before the Yield falls further.
18/X If this outlook is correct, that is partial evidence that the wave 5 on the way up is over. And we could see more Yield downmovement next week, We put out orders to buy TMF at the Weisshorn ETF Fund.
19/X henry.rivera
Sep 23, 2022 5:06 PM
Hi robert.p.balan , Robert, maybe it's complicated, but can we have an EW projection of what we can expect for the indices? Just to have a reference. We know that this is still difficult to predict.
Sep 23, 2022 5:06 PM
Hi robert.p.balan , Robert, maybe it's complicated, but can we have an EW projection of what we can expect for the indices? Just to have a reference. We know that this is still difficult to predict.
20/X H.H - We're completing a five waves down in ES today _ followed by a small recovery until month-end, then a fall during first week of October. We may get a double bottom today -- then rally higher from there. This is consistent with lagged flows shown by liquidity models.
21/X Here is another scenario - also consistent with the liquidity models. We are completing an A-B-C. Market rallies till month end (wave 1) and wave 2 retest the lows, followed by wave 3. _ also consistent with the trajectory of liquidity flows . . .
22/X . . . Remember that liquidity flows provide the timing and direction, but says nothing much about the price levels attained as consequence of those lagged flows.
23/X The liquidity models posit a recovery from here until month-end (give or take a day or two). Then equity market weakness for first half of Octoer, followed by a nice recovery during second half of October. Kindly note that the models are on the basis of NY closing prices.
24/X TN probably has already completed a consolidation phase. We also make long TN scalpers.
25/X We add to long TN scalpers.
all PAM BUYS 300 CONTRACTS TN AT 119-02. LIMTI OR BETTER, R AT BREACH OF 119-07, OCO, GTC, ALL FUNDS
all PAM BUYS 300 CONTRACTS TN AT 119-02. LIMTI OR BETTER, R AT BREACH OF 119-07, OCO, GTC, ALL FUNDS
26/X It looks like the Head and Shoulders pattern has completed as expected.
27/X In case you were wondering why we were pretty blasè by this equity index decline today, is because we have large short hedger positions that have already come into play and are in the green. And we also had "insurance short orders" that are waiting in the wings.
28/X If the Yield decline persists, then at some point, the equity slide should stop, and hopefully by that time, we have enough daylight between market price and the short positions shown above. We will exit these short hedgers, hopefully with some nice returns.
29/X Some short hedgers already well in the green __ I expect another lower low before we may get to see a trough. That's when we exit the YM short hedgers.
all PAM BUYS BACK 1152 CONTRACTS OF YMZ2 TO EXIT THE YM SHORT HEDGERS OF JUNE 16 AT 29,360 LIMIT OR BETTER, GTC --ALL FUNDS
all PAM BUYS BACK 1152 CONTRACTS OF YMZ2 TO EXIT THE YM SHORT HEDGERS OF JUNE 16 AT 29,360 LIMIT OR BETTER, GTC --ALL FUNDS
30/X Here is another anomaly that Mr. TK wanted to exploit. The DXY is still rising, because it usualy lags the changes in the 10Yr Yield, which has already fallen a lot. It takes several hours (sometimes 24 hours) before the DXY gets the memo . . .
31/X . . . Now, Gold is not yet rising even if the Yield has fallen a lot because the DXY is still rising. Mr. TK wants to exploit that lag and wants to buy a heck of a lot of Gold, when GC falls due to that forthcoming new DXY surge.
32/X
33/X Mr. TK wants to buy more GCs.
34/X Our buyback order for the large YM short hedgers was filled.
35/X Mr. TimK is less happier than I _he said we exit at 29,340, but I said a little higher to make sure we can get out of these YM short hedgers which are well in the green (I was expecting a Friday position squaring and dont want to have these winners give back much). . .
36/36 . . . So Mr. TK won the argument. He says we can reset the YM shorts at a higher level, which we may do so if by Monday Asia trade if it still looks grim.
I see you guys during Asian trade Monday.
I see you guys during Asian trade Monday.
Loading suggestions...