Higher Prices are the Cure for Higher Prices.

Friday 18th October - Daily Update

Oct 18, 2024

∙ Paid

5729 - 5746 is the line in the sand.

Realised shown above continues to fall below “implied” using a measure like VIX

Daily

Hourly

Five Minute

Another day another setup.

We had the pair of signals combined with low momentum and low SoS.

Now we have a bottom trigger “stinky fingers” but not yet a buy signal. SoS falls below 0 showing the shortest measure is falling but the longer measure is still rising.

This means we may again get a repeat of mechanically the same trade as yesterday but at different prices and levels.

Again we have the same setup as yesterday and last week but this time not at 568 or 579 on the SPY but 581.

This will fail at some point. What perpetuates the structure to fail is rising prices. Just like here with the yellow lines and prices it will more likely fail when the daily rises.

When a small 2-3% move can cross multiple layers of momentum/trend across multiple timeframes.

We can get price towards Daily B in many ways:

Prices can fall.
prices can rise dragging the levels higher and closer to price.
Old lower prices can leave the lookback window raising the levels up towards current prices.

What eventually happens is a combination of 2 and 3 combined lifts all levels leading to a 2-3% drop in price breaking levels and being as “painful” as a 5-8% drop in price earlier in the cycle.

This is what happened in April. What the media attributed to a very minor attack in Gaza causing big moves in the market was really exactly what I described above happening from January - April.

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