Tax collections fell in June as the Trump Tax Cut continued to bite into federal revenues. The fall in tax collections combined with the rise in spending stemming from Congressional Budget Busting Agreement signed by Trump, is causing an increase in Treasury supply. Meanwhile increased debt-financed deficits have kept the US economy running hot, but there are hints of slowing…
The only thing that has changed since my last monthly review of the macro liquidity data is that stocks have rallied. That has returned them to their most extended position versus liquidity since the January market peak.
Short term cycle up phases aborted.
The market is in a meltup channel. Here’s where it’s headed.
Monthly deficits have exploded since passage of the tax cut and Congressional Budget Busting Agreement. However, June was a tax collection month, padding the Treasury’s cash account. That allowed the Treasury to pay down a few T-bills in June. But there was still a big year to year increase in supply. Despite that, stocks and bonds both rallied. Here’s what…
Gold’s short term cycles are headed up, but the long term picture isn’t as shiny. Here’s what to look for.
The market broke out of a downtrend channel early last week and the current channel now points sharply higher. But the irresistable force also meets the immovable object at a level just overhead. Here’s what to look for to signal either an extension of the rally or a reversal.
Federal tax revenue has cratered thanks mostly to the big reduction in corporate taxes, but withholding taxes have also been weak. Meanwhile, strength in excise taxes and non withheld individual income taxes suggest that the economy is booming in some sectors, enough to keep the Fed on its tightening course. But what you really need to know is the Treasury cash…
Intermediate indications remain weak, but short term cycles are due for up phases in the metal and the miners. 3 mining stocks have bullish chart setups.
Intermediate indicators are turning bearish but one is telling a different story. Here’s what to look for.
By the end of the year the Fed will have withdrawn $450 billion from the banking system if it sticks to its published schedule. The annual bloodletting will then plateau at $600 billion per year until the balance sheet reaches a tight reserve position. We have seen the effects in the money markets and we’re starting to see them again…
The negative cycle setup that developed in recent months is playing out. Cycle projections point lower still. Here’s what to look for.
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Tax collections fell in June as the Trump Tax Cut continued to bite into federal revenues. The fall in tax collections, combined with the rise in spending stemming from the Congressional Budget Busting Agreement signed by Trump, is causing an increase in the government’s issuance of Treasury bills, notes, and bonds, month in and month out.
That increase in supply puts downward pressure on bond prices and increases in interest rates and bond yields. It isn’t obvious in the bond market at the moment, since the 10 year yield has traded in a tight range around the 2.80s. But short term T-bill rates are soaring, with the 13 week bill hitting 2% this week.
Meanwhile increased debt-financed deficits have kept the US economy running hot, but there are hints of slowing in current data. That’s not supposed to happen. Tax cuts and deficit spending are supposed to stimulate spending.
The post The Trump Tax Cut’s in Full Swing. But These Debts Don’t Look Good. appeared first on Lee Adler’s Sure Money.
Global Central Banks have so numbed Treasury markets it is as though Bernanke and Yellen gave a massive shot of Lidocaine to financial markets since 2008.
The volatility we have seen in the markets since early February is enough to put bears and bulls alike at unease. Prior to early February, the markets were climbing up and up, making it worth maintaining a long position and buying each and every dip.
Just have a look here at the SPX:
But early February was the warning shot across the bow for the bear market that I expect. If you had been following the advice that I published throughout the third and fourth quarters of last year and into January, you would have converted to 60-70% cash and saved yourself from the headache and loss, which that shot would have inflicted.
Since February, the markets have been up and down. There are times when the market gets locked into a trading range and the market chops and churns, and the past 6 months have been a case in point. I call these periods “meat grinder” markets, because they tend to chew traders up.
Nevertheless, I’ve been on record saying that a bear market will arrive soon – and I had anticipated that it would arrive even sooner. But when things go against our expectations it’s critical not to panic. We must continue to watch the charts, and stick to our analysis and conclusions about what is fueling the larger emerging trend.
The post Bulls Have the Edge, But This “Meat Grinder” Market Is Very High Risk appeared first on Lee Adler’s Sure Money.
Crypto-blockchain technologies are leveraging the potential of computers and the web for direct political-social innovation.We’re accustomed to three basic templates for system-wide solutions or improvements:1. an individual “builds a better mousetrap”…
On the one hand, The Federal Reserve has been raising its target rate (upper bound) in recent years, from 25 basis points (Dec ’15) to 200 basis points today.
But if we subtract inflation (CPI YoY) from the target rate, we see that The Fed is st…
Russia has dumped most of its US Treasury holdings, back to the small holdings from 2007.
US housing starts in June crashed 12.3% MoM, the biggest June decline since 1959. And maybe before 1959.
Based on both my cyclical/technical analysis and liquidity analysis, I had a July 10 deadline for the end of the strong period for stocks. We’re now a week past that point and the market remains a tad higher than it was on July 10, and higher overall than I anticipated. When the market misaligns with the projected timeframe of my analysis, it’s time to ask whether I’m wrong or just early. As I do my research, that question is never far from my mind.
It’s important to always do a little post mortem when things don’t go as expected. In doing so, I try to figure out what happened and what I missed that caused the market to operate outside my expectations. That can help me make a course correction in my current forecast. At times, it can even help me recognize a new or different indicator that provides me with a deeper understanding of what’s driving the market, and where it’s ultimately headed.
While I cannot possibly account for every fluctuating input influencing the market direction, I try to recognize those that are most important.
The post My Crucial Bearish Indicators, Plus a Critical Bullish One I Missed appeared first on Lee Adler’s Sure Money.
The news is constantly abuzz with scary “Trade War!” headlines. But it reminds me of Wendy’s hamburger
Last week I made the case for gold prices finally finding their bottom, but the market would have nothing of it.
The pain wasn’t over, as the resource space as a whole took a hit while the dollar rallied once again.
But what’s hurt the price of gold ov…