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Expect Increasing Market Volatility in the Coming Days ...

A big market decision is approaching: Expect increasing market Volatility in the coming days ... and then a powerful move afterwards.

The reason: Everyday, we track the Long Term Inflowing Liquidity going into the markets. This is a liquidity driven market, so this is an important underlying element to what the stock market does. (This study is posted daily on the paid subscriber website.)

What's happening: If you look at the Liquidity Flows in the chart below, you will see that we have a converging triangular pattern. What that means, is that the up and down inflows have lower tops and higher bottoms setting in. As we approach the apex of the triangle, Volatility will increase and occur within shorter time frames until a break out occurs.

What happens after the breakout: The breakout will be followed with a sharp movement of the stock market in the same direction. If it is to the upside, large amounts of money will flow into the market sending it higher.

If the breakout is to the downside, large amounts of amounts of money will flow out of the market sending the market lower.

Which direction will it breakout? We cannot determine that at this point, as many underlying market technical-fundamental indicators are close to a Neutral condition. Who ever is on the wrong side of the equation when it happens will feel some pain. This is an important formation that will have an key impact on the market.

 

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