There’s always a rally somewhere. Can you see it?
I call this The Liquidity Trade. It’s 3 1/2 points off the low of 8 days ago.
Not much. Not good.
The TLT of course is a proxy for the bond market. It’s the 20 year Treasury bond ETF. If you are still holding bonds, what can I say but, “Oh the humanity.” But I warned you. I’ve been screaming to GTFO since August 2020.
But there’s still a lot more cash coming into the market from T-bill paydowns in May, and that’s short term bullish for the 10 year. I think it will drop below 2.65 and that will trigger a lot of short covering in the futures. So the 10 year could target 2.50. Another gift rally for the longs to take as an exit. But they won’t.
Tons of Cash, Not In Use, Signals this Huge Change in the Market
While also expecting a short term rally in stocks has been the wrong conclusion to reach on that, at least my technical output, which is more mechanical and less discretionary, has been more on the money.
As for today, it’s Dead Cat Bounce Day. The ES 24 hour S&P futures are off the low of yesterday’s sheeting of the bed. But they hit resistance at 4220 in the 4-5 AM hour in New York. Now the bulls must show up, or that will be the zenith for the day.
Looks to me as if they really need to clear 4235 to get anything significant going on the upside. Failing that, I’d look for this to go back and make a double bottom, where they’ll try again. And eventually fail.
And oh gold. Ugly. Will gold bugs get slaughtered again? My thoughts on that.
Meanwhile, BTC is out on a ledge. If it starts to curl upward before breaking 37,000, bullish. But if that breaks, I say it’s over. Say Kaddish for Crypto.
Meanwhile for my fellow American expats living in Europe, while earning our incomes in doolahs, this is going well for us, not so well for Euro peeins. The euro is now targeting $1.05 in the short run and about $1.03 a little further out.
The euro has broken a 15 year trendline. If it doesn’t hold $1.03, it will reach parity with the dollar.
As long as the Fed is tight as a drum, taking dollars out of the world financial system, and the ECB isn’t, or is less so, this will continue.
And for the big picture:
- Swing Trade Chart Pick Screens Flip Flop April 25, 2022
- Ugly Whipsaw Revives Crash Potential in Stocks April 25, 2022
- Tons of Cash, Not In Use, Signals this Huge Change in the Market April 23, 2022
- Sell Gold in May and Go Away? April 19, 2022
- Primary Dealers Still Long and Wrong, But A Gift Rally Looms! April 11, 2022
- Why March Withholding Taxes Showing Red Hot Economy Is Bearish April 3, 2022
- Fragile and Dangerous Semi Blind Spot March 28, 2022
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