Market Geometry & Macro Analytics

Released 12/12/13

With markets disconnecting from predictable risk, fundamental, valuation and technical patterns something new is required.  Our work on FLOWS (Liquidity, Credit & Debt) is allowing us to navigate the monetary madness and isolate tradable patterns.

Our Macro Trigger$ Zones have called for a downward BIA$ going into the December FOMC meeting, prior to a Santa Claus rally.

This is what is presently occurring.

Somewhat confusing has been the US Congress’ December 13th Budget Committee deadline.  Rumored leaks of a resolution to the historic pattern of political wrangling and gridlock sent the markets up (Leg B below), but when it was unveiled the markets were shocked (Leg C) and dropped dramatically at what compromise had actually been reached.  Former Congressman David Stockman summarized it well in a CNBC interview from the floor of the CBOE, with an equally appalled Rick Santelli: Interview: Budget deal a 'Joke and Betrayal'.

The concern of Fed “TAPER” plans being unveiled at the December 17-18th FOMC meeting will temporarily halt further market advances.  An orchestrated surge in excess global liquidity is presently intended by the Central Banks to shore up global collateral values via elevated equity prices.  A consolidation is temporarily required.

TRIGGER$ MARKET GEOMETRY

The recent action from the S&P has given us a chance to use some of the Trigger$ market geometry we have in our toolbox for such situations.  We should stipulate that the following charts were published for our subscribers as of the dates given, and this demonstrates the predictive potential of these tools.  

Our first chart was published on the morning of Thurs Dec 5th.  Note the blue triangles on the chart. A duplicate move was expected and the triangles demonstrate this.

What is interesting about the triangle is that it is actually representing a Gann concept.  The right half mirrors the left half, and in our context this means the market travels the same distance and time from the peak to the base of the triangle as it did from the base to the peak.  These are two identical price and time moves from the market, or, price and time are squared.

The next chart is the update published for the morning of Thurs Dec 12th, one week later.

Here we can see the lift and drop of the market; and although it’s not an identical pattern as the original, the end result is the same.  Price extends slightly higher, but the base (time) is unchanged and the overall concept of the triangle remains intact. It is the three points of the triangle that are of interest, representing moves in price and time; the pattern between them is unknown and rarely identical.

You will note that there appears to be a lot more going on with the chart than just the triangles.  The High Probability Target Zone (HPTZ) methodology overlaps and integrates several technical methods and tools, identifying areas of confluence (targets) and providing the locations of the major supports and resistances for the market. 

The technicals are then combined with the Macro view to give them context and a perspective to analyze them with. 

Together they provide a roadmap and targets for the market from the major Global shifts and market pivots down through to the daily twists and turns.

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Gordon T Long    
Publisher & Editor
general@GordonTLong.com     

Gordon T Long is not a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. Of course, he recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and barring that you are encouraged to confirm the facts on your own before making important investment commitments.

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