A Dangerous Game

A week of rolling dice … And it may not just be dice that rolls..

The next 5-10 days could be the most important in 2018. Markets continue to follow our 1 minute 1987 Maps into a major inflection point before either a crash or a final blowout.

(the full forward projection of this map is available to subscribers in 8 Hour evidence on our SPX page).

Although we have a clear trading strategy to exploit this continued or even increased volatility in indices whatever happens, the three other asset classes (currencies, bonds and commodities) increasingly shift the probability towards one particular outcome.

Even with an extensively researched and remarkably accurate set of FITS (fundamental, intermarket, technical and sentiment) criteria for the 1920s and 1980s style stock uptrend, we have been surprised by the extent some of these conditions have been met. Perhaps most notably the intermarket projection that called for a collapse in market correlations and an almost unique interaction of the four asset classes.

With this astonishing degree of repetition, it really emphasizes the role of the USD in the major stock reversal.

It is one reason why we have been so keen to monitor the USD’s correlation to stocks and indeed the recent inversion (into a negative correlation) that also featured prominently in 1987. This not only provides us with a series of potentially powerful maps for currencies for next few months but also reinforces our view and position within the 1987 stock template and this important final surge in yields. This will be the subject of a premium article for subscribers next week. This week, because of this development, we are finally able to produce our Commodities 2018 Outlook (for subscribers) that fits neatly into this asset interaction.

It is going to be an interesting week. Jerome Powell is set to provide his first Humphrey Hawkins testimony for which we have our usual fractals lined up. With the backdrop of a sharp market sell off and perky inflation (10 years are approaching our 3.00% target) the market will look to see where Powell ‘puts’ the Fed on the hawkish spectrum. Less than 2 years ago Brexit prompted a mini crash immediately after Humphrey Hawkins. Let the dice roll…

Good Luck

Ed Matts
Founder
Matrix Trade

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