Note from Lee: Tim posted this before today’s bear killing spree, but most of it remains timely and relevant.
Liquidity moves markets!Follow the money. Find the profits!
Not that anyone should care – – particularly the market gods above – – but this is exactly, exactly, exactly the kind of market I love the most. Specifically, one which is slowly but surely grinding its way lower, breaking trendline after trendline. Nothing dramatic. Nothing so newsworthy that it gets government intervention. Just………bleeding.
Looking at the longer-term ES, you can see the three important events tinted below. First, in yellow, was the breakout to lifetime highs, at which time you-know-who was yammering on about how great everything is, and the pinheads at CNBC told everyone to go buy equities.
Next, in magenta, was the failure of the bullish breakout. That was a key moment. And, most recently, in cyan, was the failure of the intermediate-term trendline. Last Wednesday and Thursday, the desperate powers-that-be bought equities like mad to try to create new lifetime highs, but all it accomplished was successfully test the broken trendline, and we were repelled.
Throughout all of this, there have been two classes of instruments I have been unabashedly bullish about: bonds………
Allow me to say this: the surge in gold is not a vote of confidence in the genius and infallibility of the world’s central bankers. On the contrary, it is a signal that intelligent people have had absolutely enough of the bullshit from the likes of bureaucratic bumblers like Mario Draghi and Jerome Powell, and they are securing real money, not colorful scraps of paper.
Added to which, the reason bonds are soaring ever-higher isn’t because the hideous Abby Joseph Cohen told everyone to short them fourteen months ago, creating one of her worst calls of all time, but because the doomed economy is going to have to accept lower and lower negative interest rates in order to keep this farce going a little bit longer.
For myself, I ran out of buying power (well, shorting power) three days ago, and I’ve been busying myself with an important SlopeCharts upgrade. I was hoping to announce it yesterday, but I wasn’t happy with it yet. I’ve got 70 positions and am completely max’d out. So……..good luck!
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