Think Sideways Is Boring? Sideways Is When You Make The Money. Patience Is Key.
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Designed To Take Impatient Money Away
The major indices have tracked sideways for aeons now - well, a couple weeks anyway, which is aeons in trader-time. Sideways unnerves people, and is designed to have you lose money by trading thisaway and thataway only for no upside breakout nor downside breakdown to actually take place. Longer term investors won't care - will have barely noticed in fact - but folks glued to their brokerage screens all day run the risk of trying to push water uphill if attempting to trade a trend at present. For the trend is, sideways.
Sideways, though, isn’t a decisionless state. Sideways is where Big Money is making the money and where Small Money is losing the money. Sideways at pivot lows is where large account players are slowly accumulating positions - building inventory basically - and sideways at pivot highs is where that inventory is being distributed, or in the common parlance “dumped on retail”.
This is how we interpret the sideways motion right now - Big Money realizing some of the paper gains chalked up since the end of 2022 lows, ready for (what we assume to be) disappointing Big Tech earnings to drive the market down somewhat, whereupon retail will sell and Big Money will buy.
Now, before we go on to our index charts, a mention of our premium Cestrian Inner Circle service. Inner Circle is where we publish our very best work, the self-same work we use to invest staff personal accounts. Every morning, Inner Circle members receive a long-form note explaining how we see the markets today, how we’re positioned in staff personal accounts and why, and then our detailed take on all four major US equity indices, the 10-year yield, plus Bitcoin and Ether. We provide extensive commentary daily. You can learn more about this service here.
Now, on to our daily charts.
S&P500 / SPY / ES
Once again - we believe the short-term triple top in the ES futures will act as resistance on the S&P for a little while.