The Macro Liquidity Index (MLI) has been hanging around 3 month highs. The Fed and foreign central banks (FCBs) continue to create liquidity, offsetting weakness in Government Sponsored Enterprise (GSE) credit creation. The S&P remains at peak trend levels relative to the primary sources of macroliquidity that we can measure, suggesting that an intermediate top is at hand. But it has been that way for months and the market has continued to advance. The indicator has suggested since November that market risk is at an extreme, but the guess here was that conditions would probably not be ripe for a correction until January. January came and went, but the correction didn’t, because the Fed and FCBs have been so generous. Click here to download complete report in pdf format (Professional Edition Subscribers).
Try the Professional Edition risk free for thirty days. If, within that time you don’t find the information useful, I will give you a full refund. It’s that simple. Click here for more information.
Join the conversation and have a little fun at Capitalstool.com. If you are a new visitor to the Stool, please register and join in! To post your observations and charts, and snide, but good-natured, comments, click here to register. Be sure to respond to the confirmation email which is sent instantly. If not in your inbox, check your spam filter.