Micron: Nay-I

Today after the close were the earnings for Micron Technologies (MU). These followed a day when the ES futures first made a lower daily low then, primarily in the after-hours, reversed to close higher as in the daily chart below.

The lower daily low kept the swing-line lower, and the close under the 18-day SMA keeps the daily bias down for now.

I'm glad Micron is working on A-I. But the current state of information flow is just awful, artificial or not. I waited on several sites for the MU earnings release. I almost never do this. One of the sites specializes in earnings, and another is connected with a well-known financial news TV network. The site that claims to specialize in earnings said they would be released at 4:00 pm (ET). Simple enough - by about 4:01 pm the earnings came out but not the revenues. 

A couple of minutes later still nothing from the TV site. Not even the earnings. I kept refreshing each of the pages for several minutes, still no revenues at the earnings specialization site, and still nothing over at the TV website.

I waited 'till about 4:10 pm and then had to leave for an appointment. Nothing changed. I kept refreshing and refreshing. Nothing different.

I came home to write this about 2 hrs later and both of the sites were updated with earnings and revenues. Yippee! (Not).

You see, everything a trader or investor needs to have in an earnings release can be summarized in about five lines.

1. Earnings per share
2. Revenue
3. Guidance
4. New Products
5. Special Situations/Challenges

Why in the world such a simple statement can not be released at the agreed upon time is absolutely beyond me. It should be available "on the minute", not on repeated refreshing nor having to check several sites.

What good is A-I, if information release itself is going to be so scatter-shot? Artificial Intelligence can analyze a lot - but not if it isn't given the information in the first place. The more I interact with the trading/business world, the more ridiculous some of these lax practices seem.

So mighty Micron will make more money making more chips. For what? You want more data centers? For what? As I was watching for the after-hours earnings, one could see the ES futures move steadily higher at least in unison with the initial earnings per share (actually starting about 15:30 ET somewhat in anticipation). Is a new data center going to change that situation?

Yes, a new data center might better help you plot your personal voyage to Betelgeuse, so you can study the supernova - if and when it happens - in person. (The computers used to guide Apollo to the moon are probably not good enough.) Oh. But guess what? Even though you plot your course, get it laid-in the Nav system, and get launched in the right trajectory using your new super A-I data, your lifespan isn't long enough to survive the 672-light-year journey even IF you could travel at the speed of light; which you can't yet.

Go ahead. Make more chips. Make a LOT more chips. Pollute the air and the water doing it, only to have them become as obsolete as my old Pentium-3. At some point, data processing is at least sufficient for most tasks. I'm not sure what benefits the 14th generation I-7 is even delivering compared to its first couple of iterations. It certainly didn't make the earnings release happen any earlier.

Get my drift? Have an excellent start to the evening,

TraderJoe

Yawn?!

Today provided a lower high and a lower low on the swing-line indicator for the ES futures with a daily close under the 18-day SMA. This sets the daily bias as lower - at least for the time being.

ES Futures - Daily - Swing Line Lower

Some of the internal movements were a bit whippy, so it wasn't a total yawner - one had to stay on their toes a bit. But it is summer, and a lot of people have other things on their minds like vacations, World Cups, staying cool in hot weather, etc. So, less interest might be expected.

Still, from an Elliott Wave perspective, the current wave structure counts like it is unfinished, so it might be possible for price to target the lower daily Bollinger Band. Note that the daily slow stochastic is nowhere near over-sold yet. And price is still in a downward sloping parallel so lower lows might still be expected.

Have an excellent start to the evening,

TraderJoe

Weaks Away?

(Pun intended). Is the Dow Jones Industrial Average, and its futures contract, shown below, days or weeks away from a major top? With 109 candles on the 8-hr chart, the pattern we posted in the comments of a prior post can still be playing out. It would be that of that overlapping expanding diagonal pattern with the 3-3-3-3-3 internal sequence, which is classified as a terminal pattern.

DJIA (YM) Futures - 8 hr - Expanding Diagonal

The three-wave sequences of a-b-c's are clearly shown. There is good form & balance with every numbered wave on an opposite side of the EMA-34. Nothing looks rushed, and we are trying to give the last wave as much time as it likes to play out because typically the waves expand "in time", too.

Sometimes, the last 'b' wave in this pattern will be a triangle. That can stretch the timing out some if the market wants. But the overlap seems like a key clue to this pattern. And there is a lot of room for algorithmic back-and-forth within its daily Bollinger Bands.

Unfortunately, I'd have to say that while a higher high often, and most usually results in this pattern, it simply does not have to if it is the true end of a larger pattern. The last wave can fail - which will also make it a bit of a cat & mouse game. But the (v)th wave has already exceeded the length of the (iii)rd and so the pattern is 'qualified' by the rules.

Further, also as previously noted, the expanding pattern shows up clearly in the waves of the Elliott Wave Oscillator (EWO or AO).

The b wave can be quite intractable, as usual, and it can be 'any three' including zigzags, multiple zigzags, flats, expanded flat or a triangle as noted.

But the last c wave, up, should be countable as a 'five' even if it truncates.

I'm really happy to see that the once mighty Dow, the once king of the indexes, has lost its following at this time, and everyone is all "NASDAQ & Mag10, and don't bother me with anything else." Maybe this once great index will still have a story to tell.

Have an excellent rest of the weekend,

TraderJoe

The Battle of Juneteenth

This famous historical battle is being fought at the 18-day SMA on the ES daily chart below. The snapshot was clicked about 9:30 am - just a few moments ago. It's hard to get closer than that.

So far, the correct answer to the question of, "will the up (green) fractal or down (red) fractal be broken first?" is, well, neither. Reminder: Globex only has a partial day today.

Have an excellent start to the day,

TraderJoe

Warsh-It (2)

Gesundheit.  Whatever you thought of the new FOMC Chair's performance today, the market sneezed enough to flip the daily bias to lower with a close on the daily ES futures below the 18-day SMA, filling a daily gap in the ES futures in the process. This condition needs to be monitored as to whether the new up (green) fractal is taken out before the down (red) fractal or vice-versa.

ES Futures - Daily - Bias Down

I've seen a lot of corporate CEO types come & go. I've worked for some. Yea. They always start with "what a great team we have here", and "things are gonna change beginning now". And, when they don't know what to do so immediately, they typically create lots of committees to 'study things'. 

As the reporter said at the press conference, "if you were serious about cutting inflation, you would have raised rates today." He didn't. He listened to his other peers who likely told him, "You're gonna have a bad enough market reaction just saying you're serious about inflation without the rate hike. Raise rates too and you're going to see real problems".

Instead, he let his jawboning both take the edge off some assets and raise rates over in the bond market too.

And, ironically, he said he needed a task force to "study" the reason for inflation. Meanwhile, everyone on the committee and in the room is snortle-chuckling thinking, "uh, don't we create inflation by printing money and destroying the value of the dollar? We need a task force for this, huh?"

And, when asked whether financial conditions were easy or tight, he rightly answered, "well, they are certainly different in the housing market than elsewhere." Boom, chacka boom. And what organization was it that raised interest rates from 0.25 to 5.25% in a couple of years? Oh. Meanwhile, his speech today raised interest rates marginally on the longer ends of the curve: the end of the curve housing depends on.

So, all-in-all, it's a "kick-the-can-down-the-road" performance, just as many of Jerry's later ones were. Of course, the three blind mice (Bernanke, Yellen & Powell) weren't really blind, except to inflation. They just knew if they stopped printing money, then asset prices might fall. Meanwhile, prices at the imaginary Grocery have just about doubled (i.e. 100% inflation). And, the Grocery is only imaginary because it's not counted in "Core PCE". I don't know about you, I think they just about have the "core" backwards. I need to count on food & energy the most, right after shelter, so it shouldn't be excluded from anything.

But, when you make decision by committee, this is what you get. Committees are fine except you have to watch out for a committee's natural tendencies to 1) be too polite, 2) water things down too much, 3) stall and ask for more time, 4) ignore the more vocal - and usually the more correct members - because for some reason, they seem to have a temper. When, really, the answers are simple - just painful to implement. And no one wants the pain.

Have an excellent start to the evening,

TraderJoe

Warsh-it

When I needed my clothes cleaned because I got them muddy as a young kid, I would ask my mom to wash them. Apparently, when something is muddy in the Midwest (particularly 'round Ohio, Indiana and Illinois) you ask to have them warshed - well you say it that way. The wave counts are currently a bit muddy, maybe the meeting tomorrow can help make them cleaner again. The hourly ES futures are below.

It looks like - at the moment - there are three waves down from the high, but they currently count best as two zigzags, starting with the diagonal "a" wave we pointed out yesterday from the high.

Of interest, the second wave down is 1.618 x the first. And price got under a prior overnight low. I'll be a good boy and not suggest that it means that upside & higher all-time highs can't happen. I won't suggest that maybe the ES & SP500 will truncate. I did not say that. You did not hear that. Being over 78% it could still be the fifth wave. With an FOMC meeting tomorrow a lot could happen. And much could happen over-night. I would keep my eye on that overlap warning level, and on the 18-day SMA which price is still above.

Today was an inside day. A day of rest. Have a good start to the evening,

TraderJoe

Risky Business - 2 (Why It Can't Be Any Other Way)

Today did not take out the risk area proposed in cash or either sole ES futures contract (JUN or SEP), but it did exceed it in the roll-over contract (SEP stitched to JUN on the volume roll-over-day). The risk area could be history in the next day or two - especially with a FOMC meeting coming up. Or it might hold. But the odds favor the former.

Any number of people complained about the ugliness of the market movements today, and how ugly structures are made or typical technical levels broken just to trick the public into different counts. I want to tell you why it has to be so. Think of it like this ... I do.

Hint: You are Not Dressed in White

Look when - as a trader - not an investor, you sign up with a brokerage firm, they know everything about your finances - which is all they care about. They could care less about whether you're a Moving Average Trader, or a Breakout Trader, or a Range Trader, or an Elliott Wave trader.  Not relevant.

You sign up (if with a futures firm) and you must agree to the following conditions: A) a Clearing Firm will clear all of your trades - that means they know which trades you put on and where you put them on in the market, and where you take them off. B) They know the size of your trade. Did you just trade one micro at the market? Did you trade 10 E-mini's on a limit-entry? Regardless, they know. C) They also know your margin - and in fact, display it back to you in real time (big hint: they are tracking it!). They are required by law to track it, so you don't wind up in a margin call. D) They also know historically when you trade. Do you usually stop trading at the close - possibly because of margin? Do you usually stop trading at 11 pm so you can get some sleep. In short, they know. They know you. E) Your brokerage agreement also specifically states that your brokerage firm may take trades against your position. Really? You heard it. And if that isn't bad enough, F) Your margin may be swept by the brokerage firm, so that they can earn interest on the balance or use it otherwise. Listen to that again: let's say you go short a futures contract. You post the margin to do it. The clearing firm sweeps that margin balance to your brokerage, and the broker can use that money to trade against you.

Your money being used against you. This is just as long as they segregate your funds for the brief reporting period at the end of the day, so they can account for what is yours and what is theirs (they robbed from you). All of that became clear in the MF Global bankruptcy and following settlements.

Now can anyone tell me they signed a brokerage agreement that says, "This Brokerage will not keep a historical record of their client's activities over time."? Well, certainly not. The brokerage might need that information to defend themselves in court. And what says they won't store such data to build a profile of you - including your typical risk tolerance? Is Bob ok with a $1,000 loss usually? Does Janet usually bail at $450 in the red?

Do you get the picture here? Look at how much information they have about you. Period. Now ask yourself, "what do you honestly know about them?" Do you know what trades are on Blackrock's servers? Not a chance. That is proprietary information. Do you know what Megacap company is going to do a buyback, on what date, in what size & what time of day? Not a chance. That is proprietary information, too. Do you know how much money Goldman allots to the "closing buy-back" that usually lifts the market at the end of the day? Not a prayer. More proprietary information. (Although this is a documented fact that their customers once publicly complained they were not keeping a big enough balance at the close to keep driving the market to higher highs). Oh, and let's not forget the FED & the Treasury. Do you know when the Treasury is going to force a change in currency spreads to work a balance issue? Do you know exactly when the FED is going to reverse-repo somebody out of a problem?

They know. You don't. They can usually trade on it and mange it. They have the size and the capitalization to give them flexibility. You most assuredly don't know when. And if you did, you probably don't have the size to manage it.

Now look, nobody - but nobody - can manage this market & economic complexity without computers, and probably without A-I. We know there are so-called market-making algorithms to handle the trades. We already know Blackrock is using A-I. You think they're doing it to feed your account?

See, if you're a trader, you actually signed up for this. It's all part of the Ponzi scheme. They win, and if you place enough trades over time, you will probably lose. You might have good weeks, good months, but it is hard to beat their track-records with the information they have and that you don't. And it is legal that they win. There wouldn't be a brokerage business if they couldn't.

So, you think I'm done with this rant? Heck no. I've only hit the tip-of-the-iceberg, above: the legal stuff. Never, never, never doubt there is illegal stuff being done to you, too. Besides Congressional insider trading, and possibly higher, I'll give you one other example.

I'll never forget when Gary Gensler, then Chair of the Securities and Exchange Commission came on a TV interview and admitted, shortly after the pandemic, "look, during Covid, I had to literally call these several hedge fund managers up and tell them to stop texting each other with 'trading ideas' that would be otherwise be considered as 'market manipulation' as we were keeping a record of it at the SEC." They stopped. Did anything become of it? Never heard of any prosecutions as a result. But they had already done it!

They have to keep the music playing. The game must go on. One OTHER small problem is most of us can't see the nano-trades. In today's market, algorithmic trading accounts for roughly 70% of ALL trades, including the High Frequency Trading but other arbitrage & similar schemes, too.

All I can say is "the prices are in the waves", the trade details are not, except a bit with volume. So, if it were me, knowing the above, I would trade like there's a robot facing me, saying "Go ahead, punk. Make my day."

Have an excellent rest of the evening,

TraderJoe