Don’t lose sight of the Perspective Here..
Traders like to catch the final blow-off. Today’s situation is obvious. The market is running wild. Reality is not even on the page.
See below our updated Fed Influence Algo chart with the S&P at 3470 and Nasdaq 100 at 11935 @ 11:30 AM CDT. Obviously we would be in a better place at the moment if we had waited for the trigger line to cross the signal line, rather than trading the signal pattern. Too late to change that. But one has to keep in mind that this is a big picture approach that we are doing, there is more than stocks involved. Since the APEX level on 8/7/20 here are some of the inputs.
S&P + 3.5 %; Nasdaq 100 + 7.2 %; Gold – 4.5 %; 20 Yr Bonds – 3.7%; and the VNQ ETF (real estate) -1.9 %. So the pain we are feeling is basically FANG stock induced.
And keep in mind what we said yesterday, the canary in the coal mine is interest rates and they are rising. This will play out after Powell’s FED Jackson Hole speech tomorrow morning.