On 4/4/2022 at 4:12 PM, Jorma said:I would suppose that April in Nice is sort of like April in Paris so perhaps the good Dr has caught a whiff of Spring, before she finds out he’s an insufferable a hole. I mean that in the nicest possible way, really.
On Wall Street, there’s no sun up in the sky, stormy weather.
Nice has a Mediterranean climate, nothing like Paris. Paris has real winters. In Nice, it’s mostly sunny throughout the winter with daytime highs typically in the 50s. When there’s a cold snap in January, highs may dip into the upper 40s for a day or two. That’s the extent of winter here.
Temperatures warm very gradually in March with highs typically in the upper 50s and sometimes low 60s. Same in April as highs creep into the upper 60s and low 70s through the month.
Paris is more like the mid Atlantic climate I grew up with. Wild swings in weather from day to day and week to week in early Spring.
Meanwhile, there’s a definite chill on Wall Street here in the pre dawn hours around 5:20 AM in New York. The ES S&P futures have a 5 day cycle projection around 4490-95, or plausibly also 4470. There’s a sport line confluence around 4475 that seems to support the latter.
In my favorite currency pair, the EUR/USD, it looks headed for a test of the low around 1.08. I expect that to hold for another rally, but I think I detect a trend there. Can you see it?
I’m no currency trader, and I did not stay at a Holiday Inn Express last night, but I have no choice. I need to do the best I can in buying euros, especially now.
I have an apartment under contract here in Nice and recently closed on the sale of my house in FL. These are all cash transactions, so I am effectively short the euro at the moment.
Which would have been great if I hadn’t panicked at 1.11 the other day and bought a big slug of EUR. The week before I bought at 1.10. Still have about 40% of my cash in USD. Closing is set for mid June, so I have risk/reward for 2 more months.
After that, I don’t care. I’ll be in this for the duration. My heirs will inherit a pied-a-terre on the French Riviera.
For the fixed income boyz, it’s not going too well for the “deflationary collapse” bond bulls. Any way you slice it, the 40 year secular bull market trend in bonds is broken.
How’s Lacy Hunt doing? He’s a must follow. Permanent fade.
Meanwhile, liquidity analysis, which is just analysis of the supply of and demand for money, told us in August 2020 that it was time to turn bearish on bonds. And it has been consistently bearish since then. There’s no relief in sight. All rallies have been exit ramps off the highway to hell.
So is gold a good hedge? In theory, yes. But you know the difference between theory and practice, right? Apparently, we’re about to get an answer to the question. Right now is a huge inflection point.
I track and report that for you here
What about rates? This chart illustrates the point that the Fed doesn’t set rates by waving a magic wand and saying, “Abracadabra, rates go up.” When the FOMC pronounces a rate hike, it’s because the market has already moved. The 13 week T-bill is the bellwether.
The Fed does set rates, but not by these pronouncements. It sets them by controlling the supply of money. It only pretends to control rates directly, while pretending that ending QE, or starting QT is secondary. Nothing could be further from the truth. Rates are the meter of monetary conditions, not the cause. I chronicle this ongoing saga and tell you what to expect next and how to play it, here.
What about crypto? A good hedge? Uh… no.
Not based on this chart of BTC. It rallied back to the 200 day MA, stopped dead, and is rolling over again. It’s probably headed back to 37,000 for starters, and then I think much, much lower.
For more on the big picture:
- Holding Longs, Adding Shorts April 4, 2022
- Market Still in “Fool The Majority” Mode April 3, 2022
- Why March Withholding Taxes Showing Red Hot Economy Is Bearish April 3, 2022
- The Iron Pyrite Trade April 5, 2022
- Fragile and Dangerous Semi Blind Spot March 28, 2022
- Screens Be Nimble, Screens Be Quick – They Were! March 27, 2022
- Here’s Why This Will Be “The Rally that Fools the Majority” March 26, 2022
- Seven and a Half Weeks of Bullish Liquidity Ahead March 19, 2022
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