Why the tough talk out of one side of her mouth and ‘other policy tools’ language out of the other (ref. Yellen Lays Out Tools… )? Oh, I don’t know. Maybe it has some thing to do with this…
The stock market has merrily followed money supply aggregates upward since 2009. When money supply decelerates the market corrects. When money supply ramps upward the market ramps upward. Money supply has been rolling over since 2014, which was not coincidentally when the first tremors began for the stock market in its recently completed top (that wasn’t). From SlopeCharts…
It’s distressing to me how much raw, unchecked power an old, dumpy, nasal-voiced, unscrupulous human female has over the rest of us (and I’m not talking about Clinton; that doesn’t happen until the election; I’m speaking, of course, of Yellen). As we all sit anxiously awaiting whatever the old biddy has to say about the “Fed Toolbox” (Jesus H. Christ, man……..) the market is absolutely stuck, since the anti-Christ apparently is the only one in charge of all our financial fates. God, I hate that horrid little woman.
The ES is doing absolutely nothing right now. Its range is pretty wide, and if by chance the market doesn’t like what the old bat says, next week we could sink into the lower range. I’m not counting on anything, though. Whenever this disgusting creature gets ready to talk, I get nervous.
The BoE, in battling the fallout from Brexit (a decelerating economy), has dropped rates to .25%. Bond markets cheer, with US yields dropping (bonds up) and global bonds rising. From Investing.com…
As a reminder, this Wednesday is one of the year’s eight FOMC days in which, yet again, we sit up and wonder whether (a) the Fed will inch interest rates up a miniscule amount, thanks to the oh-so-fantastic global economy or (b) the Fed will do absolutely nothing, telling us for the 972nd time that they are data-dependent. Good Lord, how can you even stand the suspense?
Meanwhile, the only thing happening on my screen that is even a little interesting is that our friend crude oil continues its gentle, consistent downtrend, and quite remarkably, for the 7th day in a row, its low and high are both lower than the previous day.
“If I had a world of my own, everything would be nonsense. Nothing would be what it is, because everything would be what it isn’t. And contrary wise, what is, it wouldn’t be. And what it wouldn’t be, it would. You see?” –Alice in Wonderland
Silver out performs gold as both rise with Treasury bonds, which are in turn rising with stocks, as Junk bonds hit new recovery highs while USD remains firm as inflation expectations are out of the picture. This is highly atypical, maybe even unprecedented.
Some, deeply dug into their particular disciplines and biases, might say it is dysfunctional, as this backdrop simply does not make sense using conventional methods of analysis. Why again did I name this service Notes From the Rabbit Hole?
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.