Since Monday, hmmm were there any secret meetings that day…. The Yen has been falling. I laid out a fib retrace and am expecting the Yen to hold support at the 50% line. This is the new fuel for the rocket ship we call our stock market. This is also causing the precious metals some grief (why I bought DUST), and oil to some extent, as well. My belief is the Yen will renew its climb when our Fed does nothing in April, and no way in June with Brexit vote, on tap. In the meantime keep your NUGT’s warm.
Well, here we are once again. Instead of an earnest examination of earnings, products, dividends, and chart patterns, we find ourselves at the mercy of a geriatric female dwarf with sociopathic tendencies. It’s an absurd world we live in. As I said on my Tastytrade show yesterday, every single chart is screaming, yelling, and waving its hands, saying “Short!” But given the lunatic madness of this smelly little troll, I’m not going to get bold until she’s hobbled away from the press conference podium, making small but audible granny farts with each feeble step.
Well, brace yourselves, everyone. There are FOUR major scheduled events coming up. The first is this weekend, the G20 (which, apparently, is a big fat non-event). The next three are tightly clustered together. It’s going to be a wild – perhaps even nauseating, at times – ride.
Yesterday we reviewed the Scariest Chart in the World, an overly sensational tongue in cheek title for a chart that has bearish historical implications for the S&P 500. Here it is again. Whether the Fed is looking at this exact combination of data points or something similar, you can bet they are aware that things have come to the brink. The spread in the bottom panel is trying to turn up and that condition has not worked well for the stock market on the last two cycles.
Over the past few months a potent emotional cocktail of fear and confusion has been seeping into the consciousness of market participants. It’s not just that equities are steadily heading lower whilst producing more and more bearish context above to be overcome sometime in the future. What’s worse is that there appear to be very few places remaining to sit out the storm. The exception of course being the two usual suspects – bonds and gold. (more…)
A couple of Thursdays ago, we were all wringing our hands (or at least I was) about the powerful bureaucrat and lifetime government employee Haruhiko Kuroda and what his next move would be. He dropped a big bomb – negative interest rates – and created precisely the kind of market reaction he wanted………….for less than a single day. Since then, his world has once again fallen to pieces, since the cold fact of the matter is that Japan is doomed to be an old age colony, hopelessly mired in debt, with its economic glory of the 1980s an increasingly distant memory.
Even though these moronic central bankers are becoming increasingly impotent (a trait normally assigned merely to those who dared gaze at the hideous visage of Janet Yellen), we’re all still afraid of them and what they might do, simply because the horrid memories of 2009-2014 are too painful to forget. The latest chatter is about the Chinese government, and whatever falsified data they intend to trot out Sunday night. I personally wish they’d all choke on their chopsticks, but the universe seldom heeds the desires of Tim Knight.
Today is the day when we find out whether the Fed will be raising interest rates by 0.25%. In a normal year this might lose a contest for front page space in that event that Angelina Jolie’s dog was lost on the same day, but with the last rate rise a long long long time ago, even this tiny move has assumed a great significance.
Back in the days when The Fed didn’t spend all their time frantically trying to repair the appalling damage caused by previous Fed Chairmen, William McChesney Martin, Fed Chairman from 1951-70 said (paraphrasing) that it was the role of a central bank to ‘take away the punchbowl just as the party was really getting going’. After Volcker in the 1980s though, a persistent deflation took hold in the quality of Fed Chairmen that is perhaps expressed best on the chart below: