CHART OF THE DAY and BONDS
Powell's speech really was a change in direction for the Fed. The speech was very clever in the way he presented and the jackass analysts received it just as the Fed hoped they would. But it really was a bait and switch speech. The whole point of the speech was to announce The Fed "officially" decoupled interest rates from the unemployment mandate. Why did they do this and why now?
Well, 20 straight weeks of 1 Million+ first time unemployed (54 million total) with rock-bottom rates every step of the way. So basically the rates are as low as they can be and unemployment really hasn't budged much. Allowing the entire yield curve to go negative won't help like Europe and Japan already tried. So #1, they have to state the obvious. Unemployment cycles are not necessarily tied to interest rate cycles. Duh.
#2. The garbage about allowing inflation to run above 2% is just (cover) talk. What they are actually saying is that they will raise interest rates if the market demands despite if high unemployment exists or not. They again stated their primary mission is to save the banks. So if the market demands a fed fund rate to be set higher, they will have to do it to save the banks. They cannot allow the 1 to 3 month T-bill(s) to price a yield at 2% and keep the Fed funding rate at the zero bound range of 0.10 - 0.25%. It just won't work for long and I don't understand the voodoo of it all but suffice to say, it would likely create very unexpected distortions that would have deleterious effects on the entire private banking system, mainly themselves.
And all I read all day long on every article from every analyst is that the Fed will keep rates low forever. As if the Fed has control. They don't and they know it. There is a bond glut and they are being stuffed in every corner of the market worldwide. And every other country is in the same bond glut boat. Yes real bond rates are signaling massive deflation and are negative. But that is because bond prices are high.
When someone claims "The Fed will keep rates low forever", they are really saying, "The Fed will keep bond prices high forever." And maybe Bond prices will stay high for a while, but the Fed has no control over it. Particularly since the Fed is the biggest passive investor on the planet and announces what they will be buying more or less ahead of time.
So think about. Will Bond prices stay high forever when we are now running a $3.7T deficit just this year alone? Will cutting that to $2T next near help at this stage?
Remember when people were scared of deficits? Remember the 1980's under Reagan and he ran supposedly huge deficits? And Ross Perot ran in the 1990's for President on deficits and made a good showing. We even had the Tea Party not too many years ago which was a focus on fiscal restraint. But now? Nothing! Absolutely nothing! Why?
I'll tell you why! Because we are now numb to bonds because the bull market has been going on for 40 years. And we issue them like candy without a care in the world. Its really amazing. Everyone is so focused on the stock market as a barometer for things (and now every friggin Robinhooder is doing technical analysis or selling their services for same!) that we are overlooking the real bear in the room.
So it dawned on me as I saw article after article cautioning against the stock market is in a bubble (it is). But I have yet to see anyone say the same of the bond market. It is amazing!
People associate interest rates so closely with inflation, stagflation, deflation, disinflation that they forget that interest rates real purpose is to manage the risk of issuing the loan (bond) in the first place. I loan you $1000 cash, I want 10% interest in return. I take a risk lending you money and I lose the ability to use or invest the money therefore I want $1100 in return because you may default! Simple yes? Well that's all you really need to know. Nothing has changed. Its always been like this until fractional reserve banking was allowed to rear its ugly head.
Can I lend you $1000 and hey, I think prices will be lower in the future therefore only give me back $950 in the future ok? Would you or I ever make a loan like this??? Of course not! Its silly games!
Its no different with the US Treasury auctioning off debt by the boatload. People buy it, (taking a risk) and yet demand hardly any yield in return. And they think there is absolutely no risk at all and demand no yield. Their mindset is trapped in the bond bubble. They may all be well aware of the stock bubble, but the entire planet is snoozing on the debt bomb bond bubble (DBBB - try saying that 10 times fast!). But its coming.
Anyways, I digress. Yes the stock market has 100 million eyes glued to it, but the bond market is snoozing. And that's probably where the shock is going to come from. Therefore I will try and chart the 3 month yield, its the best we can do I guess. After hitting an all-time low in March, it hasn't matched it. Maybe we can find a count...

ORIGINAL POST
There are enough squiggles in place to consider the count over or nearly so. Since we had the big sideways triangle last couple days, made sense to re-label a bit. Instead of extended (v) of [v], we have a normal long wave (iii), with triangle (iv) and pop above was confirmed by end of day. Ity might pop a bit Monday and then it should be over (in theory).
I put the expanding triangle back in place cause it looks awesome-o!
Close up of the near-term trendlines in daily mode:
Same chart with trendlines. Do we surge toward the black line again Monday?
Of course its all about getting the DJIA over the hump, or at least through the open gap for now. Not all the way through just yet.
Danger exists though. Dow theory is in play again. Transports highest close since 2018.
I have 2 potential wave 4 endpoints as I have shown before. I went with the lower 4 endpoint that coincided with the DJIA's triangle wave 4 endpoint. It made sense in that regard.
The alternative wave 4 endpoint is of course much higher. I haven't shown this in a while, but that endpoint is the secondary count. But really, at the moment this is the top secondary count. I call it secondary because it largely aligns with the primary and is just a tweak on where wave 5 starts the count. It allows more rally in case the DJIA needs to also make a new all-time high and head toward that magic 30,000. I think this secondary count would allow for that.
Apple. If this triangle fails, its very bearish. The count perhaps calls for a huge thrust upwards Monday. of course Apple will be re-priced Monday with their 4-1 split. We'll see.