There are no guarantees in this game. Crashes are extremely rare events. But these are extreme times, and this particular setup calls for extreme caution.
The imbalance between Fed QE and Treasury supply is ugly as as it gets for the next week, but then it gets less ugly. Here’s what you need to know and how you need to see it to trade successfully.
Gold is poised for a breakout. Here’s what to look for and a couple new mining picks to swing.
We know that total liquidity is still growing. The Fed is still printing and pumping money into the system at an historic rate. That rate is well above the norms of the original QE back in 2009-10, but well below the peak panic levels of March and April. The Fed has been dialing it back from the extreme pumping it reached at the market bottom in March.
Ay, but theres’s a rub, and it’s not barbecue. It’s an irritant. And the markets won’t like it.
Last week was wild and wooly. The volatility suggests illiquidity, which at this stage is not bullish. It’s consistent with the idea I’ve espoused in Liquidity Trader reports that the Fed not supplying sufficient liquidity to support an uptrend.
But the technical stuff says, “Ay! Not so fast!”
This data tells us exactly what the big picture is right now, while Wall Street economists are still scratching their asses and trying to figure out what the government statistician manipulated data will be and will mean. And the first report from that government data is still 13 days away.
Primary dealers have been gradually paying down their outstanding repo loans from the Fed, just as we have long expected. This has momentous implications for the stock and bond markets. You need to see these charts!