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Deflation is Bullish 11/16/23

This is a syndicated repost published with the permission of Stool Pigeons Wire at Capitalstool.com. To view original, click here. Opinions herein are not those of the Wall Street Examiner or Lee Adler. Reposting does not imply endorsement. The information presented is for educational or entertainment purposes and is not individual investment advice.

  12 hours ago, SiP said:

Deflation is bullish, same for disinflation. Low rates will increase bigtech valuations. Same big 5,6 or seven will move markets.

nvidia on ath almost guys. Wake up.

Liquidity is bullish. Lack of liquidity is bearish. In the last 100 years, deflation has only occurred when debt collapsed, i.e. extreme lack of liquidity.

“Valuation” is a sentiment indicator. Sentiment gets more and more bullish when liquidity is increasing. It also helps to feed temporary liquidity increase in the form of private debt, ultimately setting up the conditions for debt collapse and deflation.

That’s how it has always worked, but of course, this time could be different.

By the way, even Fed created liquidity can be temporary, as we now know. What the Fed giveth, the Fed can taketh away.

In the short to intermediate term, we can play the market based on TA.  It got us on the long side weeks ago. And in fact, there were bull market signals soon after the October 2022 low, which I pointed out at the time.  So yes, ignore the technical indicators at your peril. They are a picture of what is. Everything else is noise.  Swing Trade Screen Picks – Loading Up on Buys November 13, 2023, Meltup Gonna Take You Hiya November 13, 2023

For the day to day, I watch and report on the ES 24 hour S&P futures hourly chart. Traders and dealers are holding on to this uptrend for dear life. But a 2-3 day and 5 day cycle down phase began yesterday afternoon. If they’re gonna take it down, today would be the day. If they stay sideways again today, look out above.

Trend spport in the 6 AM hour in New York is at 4480, rising to 4498 at the close. If they stay above that, the uptrend would remain intact. It could lead to another launch in a day or two. Yesterday’s high was 4518. If they clear that today, again, look out above.

Even if they break that first spport trend, there are several more sport levels and trendlines just below in the 4450-60 range. I wouldn’t even think about shorting unless those levels are broken.

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Over in the bond mock it, the short term trend of bond yields remains down, unless the 10 year gets back above 4.56. If they do get it back above that, then the intermediate term trend of bonds toward higher yields/lower prices will remain intact. In other words, the bear market in bonds would be reaffirmed. However, that wouldn’t necessarily be a bearish sign for stocks. At least not yet. Fuggedaboutit! Treasury Supply Ain’t Going Away

129wl0

Meanwhile, the yellow relic is showing some signs here that maybe all that glitters may not be lost after all.

129woy

For moron the markets, see:

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