Navigation Markets: The Seven Day Scope/Snipers Only
"I like to know that there are a lot of people who are going to be wrong."
“For me, technical analysis is like a thermometer. Fundamentalists who say they are not going to pay any attention to the charts are like a doctor who says he’s not going to take a patient’s temperature. But, of course, that would be sheer folly. If you are a responsible participant in the market, you always want to know where the market is — whether it is hot and excitable, or cold and stagnant. You want to know everything you can about the market to give you an edge.”
Kovner, likened technical analysis to a thermometer in the market's health assessment. He compared fundamentalists disregarding charts to doctors ignoring patients' temperatures, emphasizing the importance of market awareness for informed decision-making. Kovner highlighted the necessity of understanding market conditions, whether hot and dynamic or cold and stagnant, to gain a competitive edge.
He acknowledged the strengths of looking at a chart in reflecting market sentiments and detecting unusual behavior but cautioned against overhyped claims of predicting the future. Kovner stressed the role of personal judgment in interpreting historical price actions to anticipate potential market shifts, emphasizing the criticality of studying chart details to identify market imbalances and forecast changes.
”Technical analysis reflects the voice of the entire marketplace and, therefore, does pick up unusual behavior. By definition, anything that creates a new chart pattern is something unusual. It is very important for me to study the details of price action to see if I can observe something about how everybody is voting. Studying the charts is an absolutely critical stance and alerts me to existing disequilibria and potential changes.”
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Everyone on here knows that I adore the way this man thinks. Sometimes you find someone who helps put the jumbled pieces together. The things that you thought you understood but, you found out later that you didn’t.
I read his chapter in Market Wizards 1 hundreds of times until it made sense to me. I don’t get things easily or on the first go.
Afterwards I backtested every thing that I ever could. I wanted to understand how markets worked. When and how they moved and where to position ourselves to be profitable.
People did not know me as the “commodities guy” until 2020 because guess what? It was time to start buying commodities. When the super cycle started.
Now what are we seeing?
Utilities making a new 52 week high.
XLE Energy at an add point and continues to make new long term highs.
XLP Consumer Staples making new 52 week highs.
XME metals and mining continues to make new highs.
Gold miners new 52 week highs.
TLT Long bonds are still far from hitting a 52 week high.
The market internals tell us so much about the market.
As I keep saying we are between a reflationary environment and a stagflationary environment. Reflationary sectors are energy, financials, homebuilders, industrials and commodities like oil and copper.
Oil has pulled back but copper…
Copper-Made a 52 week high and never looked back.
The safe haven sectors like utilities and consumer staples are catching a bid right now but (for the moment) I am not sure how long it lasts unless the market is trying to say something.
That rate hikes are incoming. This was the scenario that made these sectors catch a bid in 2019. However, I would like to see bonds catch a bid before entertaining this thesis fully but it is certainly something to keep an eye on.
Another scenario is that both are right and the market is front running something that it did not front run in 2020. Which is that inflation will take off if the Fed were to cut rates.
We just discussed this an hour ago on twitter, youtube and more. https://youtube.com/live/QpnLZHoL1kQ?feature=share
The global AD line is showing strength. This is a sign that we are seeing a rotation in to other areas around the world and also that stocks most likely will hit a new all time high.
NYSE bull/bear indicator-Our compass which tells us general market direction has been spot on for years. Still in bullish territory. I would still look for more upside in the NYSE and SPX.
Stay informed. Stay resilient. Against all odds.
Warm regards, Jason Perz
YouTube: @againstalloddsresearch https://www.youtube.com/channel/UCLvDNCnhNQbQnABUSFbwagg
Twitter: @jasonp138
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