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If there was one thing that compelled me to trim my risk yesterday, it was the fact that chart after chart after chart (particularly of “younger” stocks that hadn’t been around very long) had been incredibly battered for a couple of weeks and seemed to be getting off the mat. Quantum, for instance, had fallen virtually every day for weeks, but after the stuffing was knocked out of it, there was no more selling left to do. Even WeWork was up!
I learned about a new economic data series available in SlopeCharts called Net International Investment Position (NIIP). The simplest way to think of this clumsily-named creature is as a balance sheet for a country. If a country owns a trillion dollars worth of overseas assets and owes half a trillion dollars to overseas creditors, then it has a positive NIIP of half a trillion dollars. If the figures were reversed (a mere half trillion assets but a trillion debt), then would have a negative NIIP. The first would be a creditor nation and the latter a debtor nation.
Below is a chart of the United States NIIP since 1976. Hard as it may be to believe, in the mid 1970s the U.S. was a creditor nation, Since then, if you look very, very carefully, you can see there has been a slight downturn.
Good morning, everyone. Hey, bring next week back! That was a lot more enjoyable.
Well, here’s the bad news. As of yesterday, even in the face of a huge rally, things were still a-ok. Patterns were intact. Gaps were at a distance. Charts, as I said, made “all the sense in the world.”
