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Investors Hungry for a Sweet Chart Setup
David Frost
October 26, 2023
⚾PRE GAME WARMUP
Happy Thursday...
The selling continues with overnight follow through...
We'll go with the assumption markets will work as advertised today...
[Login Here] is our early pivot today. Below on candle closes opens the door for the next place down at [Login Here]...
We have additional numbers as needed today and will post in real time on an as needed basis...
The flip side is a rescue operation which will first have to recapture 416.77 and then yesterday's close at 417.60 for starters...
Above the flatline opens the door for a push back up toward [Login Here]...
Any more buying by the bulls will promote the next numbers in the sequence as and if needed...
🎬THINK IN PICTURES
Did people start eating more chocolate once Hershey reached the monthly chart fifty period moving average?
Do we have an upcoming “on time” situation for chocolate lovers?
🌗RECYCLE TIN FOIL HAT
Markets have a tendency to trade up or down into these events. They can signify a shift or trend change in markets, geo politics and other major world events.
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💣RECKONOMICS
What do you call persistent high inflation combined with high unemployment and stagnant demand in the overall economy? Stagflation.
You can look in any direction and see what’s happening and what’s coming. Prices are still inflated which costs everyone more. Interest rates are high which prevents the same level of spending.
Companies that sell less stuff make less money so they need less people causing unemployment to rise. If more people are out of work, they buy even less stuff causing the demand for things to decline.
It’s a cycle that continues until the cure comes. The cure for lower prices is what? How about lower prices. How so?
Despite what it might feel or look like, the real economy is pretty efficient. Everything will eventually be repriced to the point where people can buy again which is called “equilibrium.”
Excesses get cleaned out, the companies that are redundant, poorly run and money losers go away. The strong survive and get stronger as they pick up the pieces. Think JP Morgan during the financial crisis in 2008. They got huge by buying the stuff that failed, but had assets and customers.
This is the way it works in general. We’re watching it in real time…
🩺PSYCH WARD
Yesterday the CBOE experienced an outage affecting what’s called multi listed options transactions which are those listed in multiple exchanges.
Could it be sinister? Could it be a hack? Could it be an inside Job?
All these things are possible, but it’s unlikely we’ll ever know the full story.
It’s also rather ominous this type of instance occurs while markets are at the aforementioned rubber band “breaking point.”
How much money do you think the exchanges spend on backup redundant geographically dispersed systems?
When things like this happen the best course of business is to step away and eliminate the variable risk of being exposed to “their” technology issues…
🏆MEMBERS SAYIN’
Thank you for the calmness and confidence you display in the trading room each day, it helps me to stay with the trade to completion. Barry B.
COMMON SENSE MARKET STUFF EVERY DAY
DISCLAIMER STUFF: Nothing found in this communication is financial advice. This newsletter is strictly educational and not intended for or should be thought of as investment advice or a solicitation to buy or sell any assets or to make any financial decisions whatsoever. Please be careful and always do your own homework.