ES1! Melt-Up
Analysis:
Given the FED has not pivoted but instead increased it's rate target. The ES1 is having what I for now, choose to describe as a bear market "Melt-Up". Granted previous bear market melt-ups have given us 20-35% up movements.
I am now expecting this PA to return to its bearish mode, any-time after the crossing of the blue- yellow down-trendline.
The wild card here being the December CPI and rate decisions. Should the FED pause as taunted, then there is a strong possibility of it visiting 4315.
Note on FED final rate:
All in all, when accounted for leverage, the current stance of the FED is comparable to P.Volker. In 1980 the leverage levels within the different sectors of the U.S economy were far different than they are today.
The usage of loans, such as mortgages, credit cards, small business loans, pay-day loans and other forms of leverage; was limited to the highest brackets of society, where-in default was unlikely even during a recession.
Fast-forward to 2022, after the lessons taught us by 2008; it is clear that we live in an over-leveraged economy. Where people cannot buy houses or afford their day-to-day tech without there being some form of credit used.
The effect of such widespread use of credit as the FED hikes without regard for leverage entranchment could result on the FED final rate of >4.6% being equivalent to Paul Volkers 22%, in people's day to day lives. When one accounts for purchasing power erosion since 1980; it becomes worrying.
All in all, we are quickly approaching the point, where-in FED policy, stops being a CB issue and becomes a political issue. The question to be answered here, is whether the government will allow the FED to keep on acting independently or not?
Each level L1-L3 (S1-S3) and TP1-TP3 has a deployment percentage. The idea is to flag these levels so I can buy 11% at L1 , 28% at L2 and if L3 deploy 61% of assigned dry powder. The same in reverse goes for TP. TP1: 61%, TP2:28% and TP3:11%. If chart pivots between TP's and L's these percentages are still respected. I like to use the trading range to accumulate by using this tactic.
This is not intended or made to constitute any financial advice.
This is not intended or made to constitute any financial advice.
NOT INVESTMENT ADVICE
I am not a financial advisor.
The Content in this TradingView Idea is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained within this idea constitutes a solicitation, recommendation, endorsement, or offer to buy or sell any securities or other financial instruments in this or in in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction.
All Content on this idea post is information of a general nature and does not address the circumstances of any particular individual or entity. Nothing in the idea/post constitutes professional and/or financial advice, nor does any information on the idea/post constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other Content on the idea/post before making any decisions based on such information.
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Given the FED has not pivoted but instead increased it's rate target. The ES1 is having what I for now, choose to describe as a bear market "Melt-Up". Granted previous bear market melt-ups have given us 20-35% up movements.
I am now expecting this PA to return to its bearish mode, any-time after the crossing of the blue- yellow down-trendline.
The wild card here being the December CPI and rate decisions. Should the FED pause as taunted, then there is a strong possibility of it visiting 4315.
Note on FED final rate:
All in all, when accounted for leverage, the current stance of the FED is comparable to P.Volker. In 1980 the leverage levels within the different sectors of the U.S economy were far different than they are today.
The usage of loans, such as mortgages, credit cards, small business loans, pay-day loans and other forms of leverage; was limited to the highest brackets of society, where-in default was unlikely even during a recession.
Fast-forward to 2022, after the lessons taught us by 2008; it is clear that we live in an over-leveraged economy. Where people cannot buy houses or afford their day-to-day tech without there being some form of credit used.
The effect of such widespread use of credit as the FED hikes without regard for leverage entranchment could result on the FED final rate of >4.6% being equivalent to Paul Volkers 22%, in people's day to day lives. When one accounts for purchasing power erosion since 1980; it becomes worrying.
All in all, we are quickly approaching the point, where-in FED policy, stops being a CB issue and becomes a political issue. The question to be answered here, is whether the government will allow the FED to keep on acting independently or not?
Each level L1-L3 (S1-S3) and TP1-TP3 has a deployment percentage. The idea is to flag these levels so I can buy 11% at L1 , 28% at L2 and if L3 deploy 61% of assigned dry powder. The same in reverse goes for TP. TP1: 61%, TP2:28% and TP3:11%. If chart pivots between TP's and L's these percentages are still respected. I like to use the trading range to accumulate by using this tactic.
This is not intended or made to constitute any financial advice.
This is not intended or made to constitute any financial advice.
NOT INVESTMENT ADVICE
I am not a financial advisor.
The Content in this TradingView Idea is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained within this idea constitutes a solicitation, recommendation, endorsement, or offer to buy or sell any securities or other financial instruments in this or in in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction.
All Content on this idea post is information of a general nature and does not address the circumstances of any particular individual or entity. Nothing in the idea/post constitutes professional and/or financial advice, nor does any information on the idea/post constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other Content on the idea/post before making any decisions based on such information.
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