Fed induced pseudotrend is happening

Time to start over and look ahead at market dynamics for 2024

The Fed created pseudotrend (hidden trend forces) that has distorted the cycles unlike anything Ive seen in years. It has taken me a a month to figure it out, there have been some things going on with my business here and I had the flu, but I spent the day looking at the chart and reviewing news that has just passed.

The result is that what you see in the chart is possibly the cyclical phasing (position) for the rest of this 54 month cycle, due to bottom just before or during elections. I have been thinking this for 4 years. Since the pandemic bottom, I figured that the 54 month cycle would bottom at elections.

I have written and talked about this before.

I think the Fed and the people in ivory towers knew what was happening with their insiders at the Fed during the bottoming process of November and the continuation into December. Knowing what the Fed was doing beforehand is shown in the charts. We have evidence of it. The market should have tanked. The Fed and its constituents who organize the money campaigns for the United States, change the direction of the market.

The chart you see below shows that distortion. The 40 week cycle (green diamond at bottom of chart for December) was supposed to be lower than that. In fact, it wasnt a trough at all. If you can see it, it was more like a flag. Now guys, cycle troughs dont do that, especially the 40 week cycle at the end of the 54 month cycle. It was distorted by the Fed and the people who gambled on the Fed reversing course on inflation with cuts in 2024. Thats shown in the chart.

There was absolutely no cyclical reason for that flag with the 40 week cycle troughing in December.

I could go into the Hurst analysis but Im not going to. Instead, just believe me when I tell you, there is something to this rally that is still yet to be uncovered for bulls. Its entirely possible that the market makes a blow off high, then moves down into its 54 month trough due later this year (orange nest of lows on chart for September 2024).

I fully believe now that people have lost their minds with this bullishness. This shouldn’t be happening and is absolutely not healthy for the market’s natural price discovery process.

Nevertheless, it is what it is: pseudotrend!

It is best to stay to the long side. The market has shown this by seemingly also breaking up through the recent 80 week peak, shown at the top of the chart with a nest of highs with a yellow circle and whiskers. Its been broken through to the upside… melted up… ignored… by bulls.

Thats a lot of information.

People are taking huge bets here, a blowoff top is forming as SPY 0.00%↑ goes into 5000 territory and likely beyond. QQQ 0.00%↑ is also doing the same thing with earnings and buybacks and dividends and everything they can to get the money into stocks. Super not healthy! But again… we have to particpate as traders.

Its good to understand what is happening.

I am here for people to find clarity and understanding with.

The next trade is setting up.

Gotta run.

Regards,

Derek