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CURRENT MARKET PERSPECTIVE


INFLATION WORRY RE-IGNITED


YIELDS FOLLOW GOLD, SILVER, OIL AND BITCOIN (MUCH) HIGHER!


Click All Charts to Enlarge

Gords-DeskTop-04-05-24-SILVER-Daily-2 image

SILVER: Silver following Gold higher (and other Inflation hedges) to new highs!

1 - SITUATIONAL ANALYSIS


SENTIMENT "ADJUSTING"!


Last week with the Fear & Greed Index down to a reading of 61 we said: "We have seen some degree of market weakness over the last week as the S&P 500 tested the 21 DMA for support. It appears that increasing numbers of investors are nervous about some degree of pullback after a historic run-up without any real corrective consolidation.

The Fear & Greed Index reflects this as it has lowered quite noticeably though registering a Greed reading."


This week we see the Fear & Greed index down to 46, a neutral reading and the S&P 500 lower at its 50 DMA level.


As we pointed out in Wednesday's subscriber's mid-week charts update, the CPI, PPI and Bond Auctions (historic "tails") shock the markets with a reignited worry about Inflation. The long expected June Rate cuts have been abruptly taken off the table and the markets are adjusting to it.


EQUITY FUND OUTFLOWS PICK-UP STEAM


The chart below shows that weekly Equity Funds Flows turned negative following steady weakness over the past couple of weeks. The chart to the right shows that even the US Large Cap funds saw impressive outflows. This is what initially has taken the S&P 500 to the 50 DMA.

LONGWave-03-10-24-APRIL-Economic-Stagnation-Will-Soon-Turn-to-Stagflation-Newsletter-2-Equity-Outlfows-Pick-Up image
LONGWave-03-10-24-APRIL-Economic-Stagnation-Will-Soon-Turn-to-Stagflation-Newsletter-2-Fear-Green-Index-Falls image
LONGWave-03-10-24-APRIL-Economic-Stagnation-Will-Soon-Turn-to-Stagflation-Newsletter-2-Equity-Outlfows-Pick-Up-Large-Cap image

APRIL SEASONALITY (POST TAX DAY) HAS BEEN HISTORICALLY STRONG

LONGWave-03-10-24-APRIL-Economic-Stagnation-Will-Soon-Turn-to-Stagflation-Newsletter-2-April-Seasonality image
LONGWave-03-10-24-APRIL-Economic-Stagnation-Will-Soon-Turn-to-Stagflation-Newsletter-2-Strong-Earnings-Optimism image

2 - FUNDAMENTAL ANALYSIS


Wall Street expects a lot of profit this year, next year and, in early forecasts, 2026. The future is bright, investors and analysts think, even though it’s extremely rare for reality to come in better than originally hoped! (chart right)


CEO'S INCREASINGLY MORE CONFIDENT!


Any potential corrective / consolidation is to likely be short lived since CEOs are becoming increasingly more confident with earnings outlooks looking strong. Typically this has led to increased buyback levels (see chart below).


NOTE: Corporate Buybacks are in a closed window due to their pending Q1 earnings releases. As they release their earnings it is expected they will again begin their planned buybacks.

UnderTheLens-03-27-24-APRIL-The-Future-Is-Coming-Into-Focus-Newsletter-3-Buffett-Indicator-Using-GDI-3-Rising-CEO-Confidence image
LONGWave-03-10-24-APRIL-Economic-Stagnation-Will-Soon-Turn-to-Stagflation-Newsletter-2-CDX-IG image

CREDIT MARKETS


Since Credit always leads markets, we are watching it closely. This includes:


  1. Inverted yield curves
  2. Negative swap spreads
  3. Collateral shortages
  4. Tightening of credit standards by banks and
  5. Reduced commercial lending
  6. The High Yield Corporate "JNK" Market. (BELOW)


CHART RIGHT ABOVE

Goldman Sachs: "We continue to advocate adding hedges to portfolios given rock-bottom levels of implied volatility".

Gords-DeskTop-04-12-24-JNK-Daily image

YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART

Macro Analytics Chart Above:  SUBSCRIBER LINK

LONGWave-03-10-24-APRIL-Economic-Stagnation-Will-Soon-Turn-to-Stagflation-Newsletter-2-SP-v-Inverted-VIX image

3 - TECHNICAL ANALYSIS


THE HEADLINE MARKET: MAGNIFICENT 7


  • We are reaching the vertical lift part of the parabolic (geometric) lift shown by the dashed red line.
  • We have intermediate term Divergence with momentum (bottom pane).
  • In the short term Momentum appears to be rolling over (bottom pane).
LONGWave-03-10-24-APRIL-Economic-Stagnation-Will-Soon-Turn-to-Stagflation-Newsletter-2-VIX-VVIX image

CHART RIGHT ABOVE: The stress in VIX is huge and the gap between SPX and VIX is widening big time. The crowd is ending the week on an extremely nervous note. Chart shows SPX vs VIX inv since Feb.


CHART RIGHT: It appears that the VIX and VVIX are in full panic mode?


MATASII CROSS: WEEKLY - CONTINUES TO SIGNAL A MAG-7 BUY

Gords-DeskTop-04-12-24-Magnificent-Seven-Weekly image

YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART

Macro Analytics Chart Above:  SUBSCRIBER LINK

bfmD8F5 image

"CURRENCY" MARKET (Currency, Gold, Black Gold (Oil) & Bitcoin)


CONTROL PACKAGE


There are EIGHT charts we have outlined in prior chart packages which we will continue to watch closely as a CURRENT "control set".


  1. US DOLLAR -DXY - MONTHLY (CHART LINK)
  2. US DOLLAR - DXY - DAILY (CHART LINK)
  3. GOLD - DAILY (CHART LINK)
  4. GOLD cfd's - DAILY (CHART LINK)
  5. GOLD - Integrated - Barrick Gold (CHART LINK)
  6. OIL - XLE - MONTHLY (CHART LINK)
  7. OIL - WTIC - MONTHLY - (CHART LINK)
  8. BITCOIN - BTCUSD -WEEKLY (CHART LINK)


CHART ABOVE RIGHT

As gold pushes to higher & higher record highs (in USD terms), Real yields refuse to play along?? I side with BoAML's Michael Hartnett and believe that what we are seeing is Gold aggressively discounting a coming collapse in Real Rates.


GOLD cfd's - DAILY


The 3 Std Deviation band for Gold has gone almost vertical with Gold prices tracking it!! Frankly, in over 40 years I don't believe I have seen this technically occur with a 3 Std Dev in Gold? Something is either broken, panic has set in somewhere or there is an "elephant(s)" now playing the market?

Gords-DeskTop-04-12-24-GOLD-cfd-Daily image

YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART

Macro Analytics Chart Above:  SUBSCRIBER LINK

INTEGRATED GOLD MINERS


We have a close eye on Gold and the INTEGRATED GOLD MINERS as represented by Barrick Gold. Barrick  It has broken out of its long term declining overhead resistance trend. It is likely time to be adding to your Gold and Silver positions on any pullback opportunities.

Gords-DeskTop-04-12-24-Barrick-Gold-Daily image

YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART

Macro Analytics Chart Above:  SUBSCRIBER LINK

US EQUITY MARKETS


CONTROL PACKAGE


There have FIVE charts we have outlined in prior chart packages that we will continue to watch closely as a CURRENT "control set".


  1. The S&P 500 (CHART LINK)
  2. The DJIA (CHART LINK)
  3. The Russell 2000 through the IWM ETF (CHART LINK),
  4. The MAGNIFICENT SEVEN (CHART ABOVE WITH MATASII CROSS - LINK)
  5. Nvidia (NVDA) (CHART LINK)
LONGWave-03-10-24-APRIL-Economic-Stagnation-Will-Soon-Turn-to-Stagflation-Newsletter-2-SPX-v-MOVE image


CHART RIGHT: What if SPX starts paying attention to bond volatility again? Chart shows SPX vs MOVE inv.


S&P 500 CFD


The S&P 500 cfd has put in a near term high and retraced to very close to the 50 DMA.


It is a testament to the strength of the equity market that with both yields moving so much higher and the dollar surging, that the equity market didn't sell off much further?

Gords-DeskTop-04-12-24-SP-500-cfd-Daily image

YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART

Macro Analytics Chart Above:  SUBSCRIBER LINK

S&P 500 - Daily - Our Though Experiment


Our Though Experiment, which we have discussed previously, suggests we have put in a near term top and will now consolidate before possibly completing one final small impulse higher or put in a 1-2 Wave of a much higher degree.


NOTE: To reiterate what I previously wrote - "the black labeled activity shown below, between now and July, looks like a "Killing Field" where the algos take Day Traders, "Dip Buyers", "Gamma Guys" and FOMO's all out on stretchers!"

Gords-DeskTop-04-12-24-SPX-Daily-Thought-Experiment image

YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART

Macro Analytics Chart Above:  SUBSCRIBER LINK

STOCK MONITOR: What We Spotted


UnderTheLens-03-27-24-APRIL-The-Future-Is-Coming-Into-Focus-Newsletter-2-Subscribers-Only image

BOND MARKET


CONTROL PACKAGE


There have FIVE charts we have outlined in prior chart packages that we will continue to watch closely as a CURRENT "control set".


  1. The 10Y TREASURY NOTE YIELD - TNX - HOURLY (CHART LINK)
  2. The 10Y TREASURY NOTE YIELD - TNX - DAILY (CHART LINK)
  3. The 10Y TREASURY NOTE YIELD - TNX - WEEKLY (CHART LINK)
  4. The 30Y TREASURY BOND YIELD - TNX - WEEKLY (CHART LINK)
  5. REAL RATES (CHART LINK)
  6. FISHER'S EQUATION = 10Y Yield = 10Y INFLATION BE% +REAL % = 2.402% + 2.122% = 4.524%
LONGWave-03-10-24-APRIL-Economic-Stagnation-Will-Soon-Turn-to-Stagflation-Newsletter-2-Wave-2-2024-Inflation image


As rate-cut expectations fell from 6 this year to 3, Treasury yields rose... non-stop... all week with the belly of the curve underperforming (5Y yields up 28bps on the week). Yields all ended back up near their year-to-date highs.


Expectations changed over the week regarding the inflation outlook moving higher, which is reflected to the right.


As the chart below of the 10T Treasury Yield reflects, with the release of the CPI (orange text bubble) it was a straight lift of 25 bps to 4.6%, before retreating slightly.


The narrative has shifted to the 10Y Treasury Yield now trading to 5.0%. We currently see 4.8% with real yield of 2.5% being the upper limit before the equity markets crack from rates and the Fed is forced to react because of the political pressure of an election year.

Gords-DeskTop-04-12-24-TNX-Hourly image

YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART

Macro Analytics Chart Above:  SUBSCRIBER LINK

NOTICE Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. MATASII.com does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.


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