When there is a lot of money available for buying an item, supply goes down
and prices go up.
The same happens in the stock market. When lots of money moves in, Liquidity
levels move from Contraction to Expansion. When Liquidity hits an expansion
level, competition for stocks will drive prices up and the overall market will
propel upward.
Currently, the market is showing a short term bias for the upside, but there
is one disturbingly missing ingredient so far.
What is it? Liquidity.
Liquidity levels remain in Contraction. Daily movements are showing oscillating
moves, so volatility will remain high while this goes on.
What do we need next? We will need to see the Liquidity indicator move
up and make a higher/high than the May 27th high (see the red
arrow). It takes inflowing liquidity to sustain up moves because without
it, up moves falter. (Today's Liquidity Indicator chart is presented as a
courtesy to our free members and can be seen daily on our paid subscriber
sites.)
Marty Chenard is an Advanced Stock Market Technical Analyst that has developed
his own proprietary analytical tools and stock market models. As a result,
he was out of the market two weeks before the 1987 Crash in the most recent
Bear Market he faxed his Members in March 2000 telling them all to SELL. He
is an advanced technical analyst and not an investment advisor, nor a securities
broker.
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