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Author: Lee Adler

I’ve been publishing The Wall Street Examiner and its predecessor since October 2000. I also publish LiquidityTrader.com, and was lead analyst for Sure Money Investor, of blessed memory. I developed David Stockman’s Contra Corner for Mr. Stockman. I’ve had a wide variety of finance related jobs since 1972, including a stint on Wall Street in both sales, analytical, and trading capacities. Prior to starting the Wall Street Examiner I was a commercial real estate appraiser in Florida for 15 years. I was considered an expert in the analysis of failed properties that ended up in the hands of bank REO divisions, the FDIC, and the RTC. Remember those guys? I also worked in the residential mortgage and real estate businesses in parts of the 1970s and 80s. I have been charting stocks and markets and doing analytical work since I was a teenager. I’m not some Ivory Tower academic, Wall Street guy. My perspective comes from having my boots on the ground and in the trenches, as a real estate broker, mortgage broker, trader, account rep, and analyst. I’ve watched most of the games these Wall Street wiseguys play from right up close. I know the drill from my 55 years of paying attention. And I’m happy to share that experience with you, right here.
S&P 500 ES Futures Chart

Bring Out Your Dead and Buy! Fed QE and Daily Stock Market Setup – May 5, 2020

So is the Fed doing enough to keep the short term bull trend going? Below is how it looks today.

Meanwhile, rogue elements of the Trump Regime, known as “doctors and epidemiologists,” are estimating a doubling of the COVID19 death toll in the weeks ahead as states try to reopen their economies. Stock futures are cheering on the predicted rise in the death toll.

Buy Death, the traders say!

US Treasury Says It Will Borrow $3 Trillion in Q2

The $3 trillion includes $1.37 trillion already borrowed in April. That implies additional borrowing of $1.63 trillion in May and June. May typically has light net new borrowing. May 2019 net borrowing totaled $67 billion.

The $3 trillion estimate is an increase of $3.06 trillion above the Treasury Department’s Q2 estimate that it posted in February.

See Liquidity Trader for ongoing in depth analysis and outlook.

Less Support from the Fed Forces Re-evaluation of Stock Market

I am rescinding the comments I made last week about the long term trend. The Fed’s commitment to maintaining a bullish trend in stocks is now in doubt, and the long term indicators on the market index charts are ambiguous.

The outlook is rife with uncertainty. We don’t know when or if the Fed will re-deploy its tactical carpet bombing of deeply embedded, indigenous bearish forces.

It’s like the Viet Nam war. The Fed has overwhelming firepower, but it may not be committed to using it because of the astronomical long term cost fighting an entrenched enemy. We need to watch to the technical indicators closely to try to determine what each side is doing and will do, and which might have the upper hand.