We’ve watched this bizarre scene unfold where the Fed is gradually reducing QE, the Treasury keeps pounding the market with new supply and stock prices keep rising. Here’s how they did it, and what changes ahead will force a change in the outlook.
Gold is due for a pullback, but what if it doesn’t? What should we expect?
The Fed is no longer pumping enough money into dealer accounts to sustain bull markets in both stocks and bonds, and it has tried to steer investors out of stocks and into Treasuries. It doesn’t matter. Rising markets create their own liquidity until they don’t. It’s called margin. Technical analysis shows us the effects of that, tells us what the trend is, and indicates when it might be reversing.
I’ve marveled at the ability of the players to keep stock prices rising despite the reduction of Fed QE, and the continued pounding of Treasury supply on the market. Even more amazing is the fact that the rally in stocks has NOT come at the expense of the Treasury market. The Treasury market has managed not to blow up.
The chart pattern may look like a top but cycle projections suggest something big is in store. Follow the money. Find the profits!Liquidity is money. Regardless of where in the world that money originates, eventually it flows to and through Wall Street. So if you want to know the direction of the next big moves…
I put together this data today on what happens when a country foregoes lockdowns. Sweden made that choice from the beginning. It’s demographically similar neighbors, Denmark, Norway, and Finland had strict lockdowns. Follow the money. Find the profits!Liquidity is money. Regardless of where in the world that money originates, eventually it flows to and through…
Bullish indications mean that we must assume that the bulls remain in control until proven otherwise, regardless of the bearish liquidity forces (See latest Liquidity Trader report) over the next three weeks. A bull move in stocks would raise the specter of a selloff in the bond market to support a stock rally, because there won’t be enough cash around to support rallies in both. But that’s not our problem. We just need to be on the right side of the move, whatever it is.
We may still find out just how bad things are. Because the dealers remain leveraged to the hilt. And there’s one more thing.