And you can probably guess what it is.
It’s baldly obvious.
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!”
The data shows that the US economy has been weakening sharply since the beginning of June. That follows May’s dead cat bounce, which Dear Leader Trump and Wall Street had all touted as recovery. Uh… no.
Here’s why.
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!
The big news this morning was a 17.7% jump in the headline number for retail sales. LOL Enjoy the rally, everyone. The stock market rally that is.
Gold prospectors look for the mother lode on the range. There are a couple of mining picks for them to swing. Subscribers, click here to…
By early Monday morning, the ES futures were trading at 2966, and had traded as low as 2925. 2950 is now critical support. If New York fails to hold that, then the market would be in crash mode again. What would the target of that be? And what if 2950 holds? Is it still bearish?
The COVID 19 pandemic is, predictably, worsening again in much of the US. Only the Northeast, and to a lesser extent some Midwestern states, have…