The Trap & The Truth
Bearish investors are about to experience their Teddy KGB moment, as the trap set over the past two days has been sprung. What follows should be an absolutely torrid pace of gains not just today, but throughout next week. Allow me to explain the trap. Here is the SPX prior to today's open. Two pieces of bait laid out for investors to either sell or get short. The first piece of bait was the gap up on Wednesday. Technical traders, of which nearly everyone is on Wall Street nowadays, are prone to the erroneous belief that every gap must be retraced in an expeditious fashion. Throw in the fact that the natural tendency is towards bearishness in this current environment and nearly everyone falls for the good ol' gap retrace play. Will this gap retrace? In all likelihood, yes. I have a good idea of when it will happen, but we are a ways away from that point in both time and price presently. The second piece of bait was yesterday's reversal, which served two purposes. The reversal in and of itself made the price structure of the market into Friday seem weak. But what it also did was to magnify the gap from Wednesday, making it an obvious point of interest for bearish investors who are all too eager to pounce. And with two traps laid in two days we have everything in place that we need for trend day up today. This means the market should close at or near its highs for the day today and for the week, as investors, once again, remain either underallocated, misallocated or downright ignorant in the face of a rally whose sole mission is to take advantage of the psychological handicaps that have been constructed over the past six months. Next week is setting up to continue the uptrend in what will be a stunning fashion. Disclaimer This website is for informational purposes only and does not constitute a complete description of our investment advisory services. No information contained on this website constitutes investment advice. This website should not be considered a solicitation, offer or recommendation for the purchase or sale of any securities or other financial products and services discussed herein. Viewers of this website will not be considered clients of T11 Capital Management LLC just by virtue of access to this website. T11 Capital Management LLC only conducts business in jurisdictions where licensed, registered, or where an applicable registration exemption or exclusion exists. Information contained herein is not intended for persons in any jurisdiction where such distribution...
Here’s The Chart That Locks In This Rally For Days To Come
Let's get right to it. This is the most important chart you will see today. Quite possibly the most important chart you will see this month. US Dollar Index: A consequential breakdown is an understatement. This is one of the more significant technical developments of the past many months. What the US Dollar is telling us today, in no uncertain terms, is that the inflation/higher rate regime is over. The US Dollar was the last piece of the macro puzzle that needed to fall into place and it has today, in somewhat stunning fashion. The upward trending channel that remained intact until today from the beginning of the year is extremely clear. With that upward trending channel came all types of chaos and difficulties for most major equity classes. Now with a break of this upward trending channel comes an entirely new set of asset allocation rules for the remainder of 2022. Think back to 2020-2021 when the US Dollar was in a downtrend, rates were moving down and commodity prices were falling. We are about to see an identical pattern emerge of investors moving back into high growth, with the only alteration being that we are now deeper in the secular bull market cycle. This means more upside volatility, with the potential for greater gains over a much shorter time frame. Continue to expect fireworks on the upside for some months to come. Disclaimer This website is for informational purposes only and does not constitute a complete description of our investment advisory services. No information contained on this website constitutes investment advice. This website should not be considered a solicitation, offer or recommendation for the purchase or sale of any securities or other financial products and services discussed herein. Viewers of this website will not be considered clients of T11 Capital Management LLC just by virtue of access to this website. T11 Capital Management LLC only conducts business in jurisdictions where licensed, registered, or where an applicable registration exemption or exclusion exists. Information contained herein is not intended for persons in any jurisdiction where such distribution or use would be contrary to the laws or regulations of that jurisdiction, or which would subject T11 Capital Management LLC to any unintended registration requirements. Visitors to this site should not construe any discussion or information contained herein as personalized advice from T11 Capital Management LLC. Visitors should discuss the personal applicability of the specific products, services, strategies, or issues posted herein with a professional advisor of his or her choosing. Information throughout this site, whether stock quotes, charts, articles, or any other statement or statements regarding capital markets...
The Fuse Is Lit
Unwind time. The selloff we saw from the gap open Monday until basically the close yesterday was mostly a result of investors either liquidating or hedging ahead of the CPI. These positions now need to be unwound quickly. Now we get to observe what the unwind will be like as we gap over resistance. There is a powerful pattern shaping up here on a break of resistance in both the Nasdaq and the S&P. Should we get follow through into the end of the week, which is what our increased long positions taken prior to the CPI release yesterday are betting on, then August goes back into vertical rip for the remainder of the month mode. Here is the NDX as we get set to open: Two steps to rip the still beating hearts from each and every bear's chest for the remainder of this week: Market closes today at or above Monday's high. Market follows through on Thursday and Friday, closing the week well above Monday's high, confirming the break of resistance. What this will do is directly target NDX 14,000+ for August. That is an 8% move up from here. Very doable. Very realistic in the face of investors who have missed this rally completely, now having to play catch up. Enjoy the ride. Disclaimer This website is for informational purposes only and does not constitute a complete description of our investment advisory services. No information contained on this website constitutes investment advice. This website should not be considered a solicitation, offer or recommendation for the purchase or sale of any securities or other financial products and services discussed herein. Viewers of this website will not be considered clients of T11 Capital Management LLC just by virtue of access to this website. T11 Capital Management LLC only conducts business in jurisdictions where licensed, registered, or where an applicable registration exemption or exclusion exists. Information contained herein is not intended for persons in any jurisdiction where such distribution or use would be contrary to the laws or regulations of that jurisdiction, or which would subject T11 Capital Management LLC to any unintended registration requirements. Visitors to this site should not construe any discussion or information contained herein as personalized advice from T11 Capital Management LLC. Visitors should discuss the personal applicability of the specific products, services, strategies, or issues posted herein with a professional advisor of his or her choosing. Information throughout this site, whether stock quotes, charts, articles, or any other statement or statements regarding capital markets or other financial information, is obtained from sources which we, and our suppliers believe reliable, but we do...
Here Is The Trading Plan For The Rest Of The Week Following Today’s Volatility
CPI and PPI are huge this week. However, after Friday's employment number, the bar for economic reports has been raised. This means that investors are that much more prone to nit picking at Wednesday's CPI than they would have been had the employment number not come in at more than double expectations. At most, this is a short-term crosswind. I wouldn't dare to say its a headwind, at this point, due to the fact that the bids in the market remain constant. Now let's say the CPI also blows away expectations, signaling that inflation is still going strong, while jobs growth is through the roof. This brings back the 100 basis point rate hike demon that haunted the market for a few days in late July. That'll be it, however. There is enough potential for inflation data mitigation, showing both inflation slowing and the economy not being as vibrant as the jobs report suggests that a selloff on investors being overly-sensitive about the CPI should be bought. And this is the point I want to make tonight. Investors are in their feelings. CPI has to be perfect. Otherwise, we selloff from Wednesday into Friday. With the technical setup being as it is after today, the odds are 70/30 to possibly 80/20 in favor of further slippage after the data. Here is the S&P 500: By no means horrible. However, you can see that the S&P has decided to stop right at resistance, while it waits for a green light to move further up. Market shenanigans have to be expected in such a scenario according to the gospel of trading 2022's inflation driven, Fed obsessed, maniacal market. A move to 4050 this week is a hand over fist buying opportunity. Everyone will be shorting or liquidating down there expecting sub-4000 to be imminent. That's where we take on further aggressive risk in high growth, with a sprinkle of alt crypto names thrown in for good measure. Give it time. Disclaimer This website is for informational purposes only and does not constitute a complete description of our investment advisory services. No information contained on this website constitutes investment advice. This website should not be considered a solicitation, offer or recommendation for the purchase or sale of any securities or other financial products and services discussed herein. Viewers of this website will not be considered clients of T11 Capital Management LLC just by virtue of access to this website. T11 Capital Management LLC only conducts business in jurisdictions where licensed, registered, or where an applicable registration exemption or exclusion exists. Information contained herein is not intended for persons in...
The Two Most Important Charts For The Week Ahead After That Weird Jobs Report
Coincidentally or perhaps not, the weird jobs report from Friday happened to hit just as we are sitting at these levels. CPI and PPI data have just become amplified by a significant degree on Wednesday and Thursday following Friday's surprise. Traders need to take note of this amplification both after AND before the release of this data. I spent a majority of this weekend's Zenolytics Turning Points note discussing these levels and what to expect for the remainder of August after Friday's report. It's going to be a helluva week. Strap in. Disclaimer This website is for informational purposes only and does not constitute a complete description of our investment advisory services. No information contained on this website constitutes investment advice. This website should not be considered a solicitation, offer or recommendation for the purchase or sale of any securities or other financial products and services discussed herein. Viewers of this website will not be considered clients of T11 Capital Management LLC just by virtue of access to this website. T11 Capital Management LLC only conducts business in jurisdictions where licensed, registered, or where an applicable registration exemption or exclusion exists. Information contained herein is not intended for persons in any jurisdiction where such distribution or use would be contrary to the laws or regulations of that jurisdiction, or which would subject T11 Capital Management LLC to any unintended registration requirements. Visitors to this site should not construe any discussion or information contained herein as personalized advice from T11 Capital Management LLC. Visitors should discuss the personal applicability of the specific products, services, strategies, or issues posted herein with a professional advisor of his or her choosing. Information throughout this site, whether stock quotes, charts, articles, or any other statement or statements regarding capital markets or other financial information, is obtained from sources which we, and our suppliers believe reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. Neither our information providers nor we shall be liable for any errors or inaccuracies, regardless of cause, or the lack of timeliness of, or for any delay or interruption in, the transmission thereof to the user. With respect to information regarding financial performance, nothing on this website should be interpreted as a statement or implication that past results are an indication of future...
There Are Continuation Patterns and Then There Is This
Patterns like this are popping up everywhere. I'm showing the major market averages here, but individual growth names are demonstrating identical traits. Here is the S&P: S&P 500 moving into resistance after a stiff rally. Contraction at resistance is a classic continuation signal. So is almost nobody thinking this can continue. You have two camps right now: Market is going lower/Market is going sideways. The "market is going to keep going" camp is nearly non-existent. In the meantime, price action is butting heads with the popular perception that this can't last. Price action wins in this scenario. Next up the NDX: Same thing with the Nasdaq. The Nasdaq 100 just plowed through resistance and followed up with a range contraction, basically coiling over the very short-term above resistance prior to its next leg. When will that next leg come? It could be tomorrow with the jobs report. It will assuredly be by next week, barring some type of geopolitical surprise, involving missiles and violent dictators. This market has left EVERYBODY behind. It won't relent until they believe that this is the next coming. Until they are foaming at the mouth to buy stocks. We are long ways from that eventuality. Enjoy the ride. Disclaimer This website is for informational purposes only and does not constitute a complete description of our investment advisory services. No information contained on this website constitutes investment advice. This website should not be considered a solicitation, offer or recommendation for the purchase or sale of any securities or other financial products and services discussed herein. Viewers of this website will not be considered clients of T11 Capital Management LLC just by virtue of access to this website. T11 Capital Management LLC only conducts business in jurisdictions where licensed, registered, or where an applicable registration exemption or exclusion exists. Information contained herein is not intended for persons in any jurisdiction where such distribution or use would be contrary to the laws or regulations of that jurisdiction, or which would subject T11 Capital Management LLC to any unintended registration requirements. Visitors to this site should not construe any discussion or information contained herein as personalized advice from T11 Capital Management LLC. Visitors should discuss the personal applicability of the specific products, services, strategies, or issues posted herein with a professional advisor of his or her choosing. Information throughout this site, whether stock quotes, charts, articles, or any other statement or statements regarding capital markets or other financial information, is obtained from sources which we, and our suppliers believe reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. Neither...
This Is The Most Important Chart Today
Shouldn't be a surprise to any of you who have been following the story line closely. The Nasdaq put in an extremely standard two day recognition of resistance at 13100 on Monday and Tuesday. And what does it do today? It takes out resistance in the most devilish way possible, by gapping up near the highs of the past two days, not even thinking of looking back the entire day. These subtle or not so subtle (depending on how you look at price) demonstrations of manipulation tell a very important story. That story is one of TIME. The markets are telling us that they want to ascend in as fast a manner as possible. In order to do that, they don't have time to punish investors with multi-day down days that typically act as rinses for the next leg. Instead, they have to punish investors with ultra-short term deception that fulfills the minimum price manipulation requirement in the minimum amount of time. We see now that the Nasdaq has cleared resistance, on its way to 14000+ during August, which is a level I have been speaking of for some weeks now as the upside target in the short-term. The time it takes to get to 14000 and how it handles this key level will tell us a lot about how much further we have to go. My guess is that the answer will be....a lot further. Stay tuned. Disclaimer This website is for informational purposes only and does not constitute a complete description of our investment advisory services. No information contained on this website constitutes investment advice. This website should not be considered a solicitation, offer or recommendation for the purchase or sale of any securities or other financial products and services discussed herein. Viewers of this website will not be considered clients of T11 Capital Management LLC just by virtue of access to this website. T11 Capital Management LLC only conducts business in jurisdictions where licensed, registered, or where an applicable registration exemption or exclusion exists. Information contained herein is not intended for persons in any jurisdiction where such distribution or use would be contrary to the laws or regulations of that jurisdiction, or which would subject T11 Capital Management LLC to any unintended registration requirements. Visitors to this site should not construe any discussion or information contained herein as personalized advice from T11 Capital Management LLC. Visitors should discuss the personal applicability of the specific products, services, strategies, or issues posted herein with a professional advisor of his or her choosing. Information throughout this site, whether stock quotes, charts, articles, or any other statement...
The Great Unwinding Has Arrived
Too many remain in the bear market rally camp while stuff like this is popping up everywhere. Below is a chart of ARKK demonstrating the perfect base in terms of price and volume following an absolute monstrosity of a correction, bordering on a downright blowup. We have investors remaining bearish into price and volume patterns that look like this. And it's not a small contingent, it's the absolute majority of investors. It's not just ARKK that looks like this in growth land. There are bottoming patterns that have popped up everywhere, with price following through confirming that we are in one of those special periods that only come around once every couple years. Think March 2020, when I was shouting from the rafters to go all in on stocks. Think December 2018, when I was begging investors to buy technology. These were also spots where nearly everyone got it wrong. Popular wisdom failed. Pseudo-analysts and technicians ran studies and developed correlations that had no relevance to the situation at the time. This is March 2020. This is December 2018. The only difference is that we are now in a bull market has matured to the point where each and every successive rally that occurs from spots like this will be orders of magnitude greater than the last. The Great Unwinding has arrived. Disclaimer This website is for informational purposes only and does not constitute a complete description of our investment advisory services. No information contained on this website constitutes investment advice. This website should not be considered a solicitation, offer or recommendation for the purchase or sale of any securities or other financial products and services discussed herein. Viewers of this website will not be considered clients of T11 Capital Management LLC just by virtue of access to this website. T11 Capital Management LLC only conducts business in jurisdictions where licensed, registered, or where an applicable registration exemption or exclusion exists. Information contained herein is not intended for persons in any jurisdiction where such distribution or use would be contrary to the laws or regulations of that jurisdiction, or which would subject T11 Capital Management LLC to any unintended registration requirements. Visitors to this site should not construe any discussion or information contained herein as personalized advice from T11 Capital Management LLC. Visitors should discuss the personal applicability of the specific products, services, strategies, or issues posted herein with a professional advisor of his or her choosing. Information throughout this site, whether stock quotes, charts, articles, or any other statement or statements regarding capital markets or other financial information, is obtained from sources which we, and our...
Quick Thoughts
- The nature of price action has changed. Everyone has missed it. - Bidders have become persistent in their demand for growth names for the first time since the 2021 market top. - Anyone labeling this as a bear market rally doesn't understand market cycles, specifically, as it relates to the nature of secular bull markets. - As secular bull markets rise so does the volatility as more participants jump on the train, causing it to sway in a much more dramatic nature than when there were only a few onboard. - I expect the volatility in 2022, when all is said and done, to be nothing short of shocking, with the upside that is to come being the more shocking aspect of it. - There is a good possibility that everything we consider as facts, whether inflation, Fed intentions or growth in economy related is completely wrong. This will become apparent in the next 6-9 months. - If you believe a recession is coming in 2023, then every single bear will need to be annihilated before prices for equities succumb to the effects of negative growth. - In order to get every single bear to capitulate, prices well above S&P 5000 are required. And when I say well above, I mean WELL above. - Alt crypto names are beginning to put in some fantastic bottoming patterns, I will be covering these in the weekly report. - Select software names are also beginning to put in patterns that look like 100% gainers through 2023. I will be covering this in the weekly report, as well. - The NDX will be hitting 14000 in August. sss - They scoffed when I Tweeted this in June Disclaimer This website is for informational purposes only and does not constitute a complete description of our investment advisory services. No information contained on this website constitutes investment advice. This website should not be considered a solicitation, offer or recommendation for the purchase or sale of any securities or other financial products and services discussed herein. Viewers of this website will not be considered clients of T11 Capital Management LLC just by virtue of access to this website. T11 Capital Management LLC only conducts business in jurisdictions where licensed, registered, or where an applicable registration exemption or exclusion exists. Information contained herein is not intended for persons in any jurisdiction where such distribution or use would be contrary to the laws or regulations of that jurisdiction, or which would subject T11 Capital Management LLC to any unintended registration requirements. Visitors to this site should not construe any discussion or information...
The Market Wants Higher From Here, The Question Is How Much?
There's a bid out there. Not sure where it's coming from but I certainly have a good guess as to why. Put simply, the inflation equation is changing. Prior to the late May lows, inflation meant inflationary pressures, and all the misery that comes with those pressures. As of June that psychology has shifted to inflationary pressures now equate to economic pressures. This means a different view of rates. This means a different view of commodity prices. This means a different view of the Fed. It doesn't necessarily matter what that view may turn out to be months from now. All that matters is that we now occupy a gray area in this bear market. That gray area is all that is necessary to create a decompression of the selling pressure that has plagued investors for most of this year. At an absolute minimum, we are headed to S&P 4300 in the short-term, as the chart below demonstrates: How the S&P handles this level will tell us a lot about what to expect for the remainder of June, and that seemingly small detail will tell us everything we need to know moving forward. Stay tuned. Disclaimer This website is for informational purposes only and does not constitute a complete description of our investment advisory services. No information contained on this website constitutes investment advice. This website should not be considered a solicitation, offer or recommendation for the purchase or sale of any securities or other financial products and services discussed herein. Viewers of this website will not be considered clients of T11 Capital Management LLC just by virtue of access to this website. T11 Capital Management LLC only conducts business in jurisdictions where licensed, registered, or where an applicable registration exemption or exclusion exists. Information contained herein is not intended for persons in any jurisdiction where such distribution or use would be contrary to the laws or regulations of that jurisdiction, or which would subject T11 Capital Management LLC to any unintended registration requirements. Visitors to this site should not construe any discussion or information contained herein as personalized advice from T11 Capital Management LLC. Visitors should discuss the personal applicability of the specific products, services, strategies, or issues posted herein with a professional advisor of his or her choosing. Information throughout this site, whether stock quotes, charts, articles, or any other statement or statements regarding capital markets or other financial information, is obtained from sources which we, and our suppliers believe reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. Neither our information providers nor we shall be liable for...