Liquidity moves markets!
Central bank, commercial bank, and primary dealer money flows are critical to market trends. Tracking them is essential for trading and investing in market trends successfully.
You’re a pro. You know what you want to do. So I’m not here to hold your hand and tell you what do.
I’m here to give you tools and information that add to your edge in understanding the whys and wherefores behind market trends. This critical context will give you the extra confidence you need to decisively execute your trades with in your strategic and tactical framework.
The Wall Street Examiner Pro Money and the Fed Liquidity reports give you regular weekly reports on the key central bank, monetary, banking, and other liquidity data you need to know to plan your investment and trading strategy confidently and stay on the right side of the market in the time frames you trade. The reports include:
- Tracking Fed cash injections to Primary Dealer accounts and showing the correlation to stock and bond market price levels
- Reports on changes in the Fed’s assets and liabilities
- Changes in the levels of bank trading and investment accounts in Treasuries and other securities
- Tracking the activities of other central banks, including the ECB and BoJ, and showing their correlations with US market levels
- Tracking the Primary Dealers’ fixed income trading accounts, both cash and futures
- Complete reports on the Treasury market including levels of new supply (or paydowns) and the expected impact on the markets.
- Technical tracking of the trend of the 10 Year Treasury and US Dollar
- Review of Federal Government tax collections in real time, showing the real, unmanipulated data on the direction of US economic trends.
- These are just a few of the indicators that will help you to clearly see the liquidity trends that drive the markets and the US economy
- All illustrated with charts clearly showing you the how, where, and why of the analysis
Here’s Why You Will Benefit
I have been publishing The Wall Street Examiner as a newsletter for active traders, investment advisors, and professional investors since 2000. Each day it’s my goal to cut through the Wall Street and government media spin to get you the facts you need to see the reality of current trends and the path of likely future trends.
You will not find this unique approach to ferreting out the real direction of trends anywhere else. It’s based on my 47 years of observing, charting, and analyzing market and economic data with one goal-–to cut through all the noise and find the actual signal.
It’s not that difficult if you understand how to read data. That comes with experience, experience you may already have, or that you’ll gain as you follow my charts and analysis each day. I’ll do that for you and present it in ways that you will be able to readily see for yourself, so that you can act with confidence in your investing and trading decisions.
By Paying Attention to What Matters, You Can See Big Changes Coming In Time To Act
By paying attention to real trends and their real drivers, I was able to call the top of the internet and tech bubbles in 2000, the bottom in gold in 2001, the bottom in stocks in 2003, and their top in 2007.
I not only called the top of the housing bubble, as a long time professional real estate industry analyst, I accurately forecast the approximate timing of the top in 2005.
I called the housing price bottom in 2012, and correctly reported that the second housing price bubble was not accompanied by a full housing industry recovery.
I also called the bottom in long term bond yields in 2012, a bottom which, in spite of being threatened this year, has held.
I saw the potential for a stock market crash developing in 2008 and chronicled the events and trends that would lead to its development throughout that summer and fall of that year. I explained not only that it would happen, but the how and the why both before and during the period of the plunge.
My Primary Purpose Is To Correctly Identify The Trend For You
Through those 8 years, my reputation as a permabear was well earned, but my primary job is to find the facts and correctly identify the market trend, regardless of whether I think those facts are healthy or not, and will lead to a stable future, or not.
That brings us to the post 2008 bull market. For the benefit of my bearish subscribers I warned throughout the November 2008-April 2009 period that Federal Reserve money printing and market support was creating a new paradigm for stock investors, one in which the US stock market would be “The Last Ponzi Game Standing.”
I was the first independent analyst to recognize that the Fed’s open market operations were directly moving stock prices, which I began reporting weekly in 2002, years before any other publication picked up the scent, and a decade before this became a widely accepted notion in the mainstream. In fact, several bloggers ridiculed my reporting on the direct correlation for suggesting that it was causal, not coincidental. That causal relationship is now widely accepted in mainstream thinking. My ability to recognize these connections early is what gives you the edge.
After watching the beginning of the new market, central bank money printing paradigm in the November 2008 – March 2009 period, I reported in April 2009 that these new central bank policies of injecting newly printed money directly into the markets were resulting in the onset of a new bull market in stocks.
I also recognized and reported on the importance that similar actions by the European Central Bank and Bank of Japan would play in driving stock and bond prices. Composite Macro Liquidity Indicators which I developed have accurately correlated with stock prices since the “new paradigm” central bank driven markets began in 2009.
With the exception of briefly succumbing to a couple of downside head fakes over the past few years, I have remained steadfastly of the opinion that central bank market rigging works to drive stock prices higher until it doesn’t, and have remained bullish as a result, with increasing caution in recent months (early 2015). We will only know when it stops working by closely watching the liquidity indicators day in and day out for any changes in their correlations with market action.
You Can Observe A Lot By Watching
It is my goal to provide this kind of leading edge observation and analysis every day as we go forward. As Professor Lawrence Berra cogently observed, “You can observe a lot by watching.”
I have been watching closely and charting market data since 1968. That’s when I first got involved with stock trading as a kid. Back then I would sit in the gallery of the old brokerage house Walston and Company with traders who were 50 to 60 years older than me and think that I knew more than they did. Boy was I wrong!
The Trend Is Your Friend Don’t Fight The Fed
I learned from hard experience through the years that the simplest lessons they tried to teach me were totally correct.
- Don’t fight the tape!
- The trend is your friend!
- Don’t fight the Fed.
- Whatever the news tells you, do the opposite! And perhaps most importantly…
- Don’t believe a word Wall Street says!
Knowing those truths, those old guys were making money. They had been at it for a long time and had learned from taking their lumps.
Interesting that even then, virtually all of them used charts. Those charts were all in book form, the old S&P Trendline charts delivered once a week, and the Mansfields, once a month. What those old guys did with those rudimentary tools was amazing.
Back then things moved slower. In 1974 fewer than 8 million shares would cross the tape all day. Brokers and traders could actually take 2 hour lunches and not miss a thing. I guess in that regard, maybe not much has changed.
Learning From The Past, Applying In The Present
I went to work on Wall Street in the late 1970s. I first worked as a retail rep for individual investors. I then worked briefly as a trader with a Philadelphia Options Exchange specialist firm and then moved to a job as an institutional technical analyst representative for a couple of regional brokerage firms.
I ended up as an institutional rep on Wall Street for Canada’s largest brokerage.
If you have followed me at all, you know full well that I was a fish out of water on Wall Street. I did not approve of the Wall Street banker culture then any more than I do now, as I learned about it first hand from the inside. But I did stick around for a few years, and I learned how Wall Street worked.
Wall Street does not work for you. It works for itself.
As a technical analyst on the Street I produced a daily institutional market letter called Marketrack for the firm Herzfeld and Stern in the early 1980s. I was one of the first to do computer generated technical analysis using the Metatstock charting program on an Apple II-e computer beginning in 1980. At that time I also led the development of a computer program at Herzfeld to generate MACD charts on every stock on the NYSE on a daily basis, something that no one else was doing at the time.
One of my innovations was the use of different time frames in the MACD moving averages. At that time, Gerald Appel, the developer of the indicator was using only the 12-26 basis. Of course today any stock charting program will let you use whatever time frame you want. I was one of the first, if not the first, to see the potential for that in the analysis of cycles.
Today we can do that on our cell phones. Back then its development required a team of programmers and the service was provided on remote terminals connected to Digital Equipment Vax mainframe system. We provided that information to our clients who included some of the biggest institutional buy side names on The Street.
Lessons Learned From The Mess of the Late 80s Reapplied In The Present
When I left Wall Street in the mid 80s I went from the frying pan into the fire, for a career in real estate finance. Through that experience I continued to track the markets and develop my analytical expertise.
Both before and while starting The Wall Street Examiner in 2000-2002, I worked as a commercial real estate analyst in South Florida for 15 years. I appraised and analyzed major projects throughout Florida during the commercial real estate bubble and crash of the 1980s. I clearly saw what was coming then and fought the futile battles of trying to stop a runaway freight train of commercial real estate financial fraud.
While integrity cost me plenty of business during the bubble phase, when the S&L crisis and crash came, I was one of the few appraisers actively sought out by the FDIC and Resolution Trust Corporation to sort through the mess in the early 1990s.
Many of the commercial development projects that I had temporarily derailed years earlier with honest appraisals got built anyway when they were reappraised by others willing to give the clients what they wanted. Many of the sales at inflated prices would have been killed had my appraisals been relied upon. But the developers and bankers always found someone else willing to “make the number.” They did not value the ability to see and report clearly and honestly.
The banks and government agencies then came back to me to appraise the worthless financial sinkholes those projects later became. Strong analytical skills coupled with integrity had become a valuable commodity. I did well in the aftermath of that crash.
As you know, that interim period of correction did not last long. By the late 1990s, bubble finance and the accompanying fraud were back in full force.
My understanding of bubbles and bubble finance grew immensely during that time. That experience helped me to see clearly what was happening in the late 90s internet bubble, and most especially in the 2002-2006 housing bubble. That was a no-brainer.
I know that many of my readers and message board members, along with the early vanguard of independent financial bloggers in the 2003-2005 period also knew what was coming. Perhaps you were among them.
The only ones who did not see it were the the Wall Street analysts, mainstream economists, and of course, Alan Greenspan, Ben Bernanke and the Fed. Anyone who had a vested interest in not seeing what was happening, didn’t.
Which Brings Us To What I Do For You Today
I’ve been at this business of technical and financial analysis for over 45 years, and I know how to apply my experience and my art to help you see trends and cycles more clearly, so that you can move more confidently in the execution of your own investment or trading strategy. This is what I love to do. Helping you to achieve your goals is my purpose.
I’m not a trader. That takes a special kind of guts and I admire those who can do it day in and day out.
I am an observer, an analyst, an honest reporter who is able to connect the dots and tell you the story straight. That’s what I do best, and that’s what I do for you.
Now I put my experience and years of observation to work for you in cutting through the noise, to bring you clarity on the trends of economic data and the markets. There’s nothing magical about it, just attention to detail, and the experience that comes with time spent immersed in the study of trends and cycles in market and financial and economic data.
All of the above notwithstanding, I have not gotten everything right. I have had my share of misfires, but when things don’t go as expected, I’ve made a point to understand why as quickly as possible, and to apply that lesson to analyzing the present every day as it unfolds into the future.
The forces that drive markets and economic activity are always changing, and I won’t be able to foresee all of those changes, but I promise to pay attention as closely as possible so that I can report on them for you, as early as it is possible to recognize that change is in the air.
Contrary to popular belief, market and economic trends move slowly. There are virtually always warning signs as the process begins and then proceeds to fruition. If we pay attention, we’ll recognize those harbingers of change early enough to protect our assets and potentially profit from the changes. Early recognition of the changing forces that drive markets may be the most important part of my mission in your behalf.
That’s a summary of how I go about doing my job for you. I thank you again for joining me in the search for clarity amidst the barrage of noisy news and investment “information” that bombards you every day. I look forward to serving you and to hearing from you in the days ahead.
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