Market On Open - Wednesday 30 August 2023

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Can The Upside Hold Up?

"News" is a misnomer or, at best, a partial truth.  "News" is what Power decides that Civilians are permitted to hear, at the time that Power decides the Civilians can hear it.  Three zillion blogs and Substacks notwithstanding, the majority of "news" remains consumed via a limited number of outlets in concentrated corporate ownership.  We don't buy this recent "MSM" political meme - this is just how financial news has always been, since its very invention.  So if you want to know what Power wants you to know, go ahead, read the news and react to it in your investing and trading.

Two things happened in the news yesterday, which according to the news today will have been responsible for the move up in markets and crypto.  The first thing is that job openings were lower than expected, which means wage pressure is likely lower than expected, meaning inflation lower, meaning less chance that the Fed makes like the shellshocked soldier still fighting battles long ago settled.  So, indices up and in particular the Nasdaq up big.  The second is that the courts decided the SEC's take on spot Bitcoin ETFs was capricious ie. they just have it in for crypto bros.  This paves the way for spot Bitcoin ETFs to open up in a flurry, and the leading candidate to have scale on day one, Grayscale's $GBTC investment trust, ought to see a closing of the discount to NAV.  Cue crypto rally.

This is a perfect example of why stock charts are so powerful.  They tell you the future, just a little bit.  If you use your peripheral vision (which is more powerful than your regular forward looking vision in some circumstances, particularly in reduced light environments) you can see the breadcrumbs of what Big Money is up to.  The reversals, volume profiles, headfakes and feints before a big move are what you are looking for, in order to position for that big move the same way that Big Money is positioned.  If you call Big Money LLP and ask them what they are doing, they won't tell you.  But they have so much money that in moving it around, the gravitational effects create small eddies in charts, and it is those low-light disturbances that you are looking for.

Because is it really possible that if you are the head of a market-making institution or a huge buyside institution, you didn't know that job openings were going to underwhelm?  Or that the SEC was likely to be struck down by the courts?  Really?  And if you were on the board of directors of such a firm, and its CEO and senior management didn't have a pretty good inkling of this stuff about to happen - wouldn't you be questioning why you were paying them the Big Bucks?  And thinking, well, I need to get me a new jockey to ride this here horse?  One that can actually see over the fences like they are supposed to?


So whilst charts aren't a crystal ball, they most certainly are prisms of sorts.  Peer at the light coming through, work out where the occultation took place and then try to see what may actually be going on in the halls of Power.  This is what technical analysis is for.  It is, for instance, why Bitcoin meandered sideways for a couple weeks (unusual in itself) looking for direction.  Then dumped hard to spank the civilians.  Then rocketed yesterday to give the good free markup money to the wise old hands buying off of the civilians at the recent lows.

And don't even get us started on that Burry business.

So Can The Moonage Hold Up?

As always, for our paying members, we now move on to walk you through our short- and long-term outlook for the Nasdaq, the S&P500, the Dow Jones and the Russell 2000, together with Bitcoin and Ether.  If you've yet to become a full member of the Inner Circle, you can sign up right here.